Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

GREATER MANCHESTER (LIGHT RAPID TRANSIT
SYSTEM) (No. 3) BILL [Lords]

HAPPISBURGH LIGHTHOUSE BILL [Lords]

>Read the Third time and passed, with amendments.

BIRMINGHAM CITY COUNCIL (No. 2) BILL (By Order)

Order read for resuming adjourned debate on Question proposed [26 February],

That the Bill be now considered.

Debate further adjourned till Thursday 3 May.

LONDON LOCAL AUTHORITIES (No. 2) BILL [Lords]
(By Order)

Order for Second Reading read.

To be read a Second time on Thursday 3 May at Seven o'clock.

Mr. Speaker: As the next 12 Bills set down for Second Reading have blocking motions, with the leave of the House I shall put them together.

CLYDE PORT AUTHORITY BILL (By Order)

ADELPHI ESTATE BILL (By Order)

CATTEWATER RECLAMATION BILL (By Order)

SHARD BRIDGE BILL (By Order)

VALE OF GLAMORGAN (BARRY HARBOUR) BILL
[Lords] (By Order)

LONDON DOCKLANDS RAILWAY BILL (By Order)

LONDON UNDERGROUND (VICTORIA) BILL (By Order)

LONDON REGIONAL TRANSPORT (PENALTY FARE'S) BILL
(By Order)

LONDON UNDERGROUND BILL (By Order)

Orders for Second Reading read.

To be read a Second time on Thursday 3 May.

EXMOUTH DocKs BILL (By Order)

Order read for resuming adjourned debate on Question [26 February], That the Bill be now read a Second time.

Debate further adjourned till Thursday 3 May.

GREAT YARMOUTH PORT AUTHORITY BILL [Lords]
(By Order)

HEATHROW EXPRESS RAILWAYS BILL [Lords]
(By Order)

Orders for Second Reading read.

To be read a Second time on Thursday 3 May.

Oral Answers to Questions — NATIONAL FINANCE

Invisible Trade

Mr. Allen McKay: To ask the Chancellor of the Exchequer what assessment he has made of the causes of the reduction in the surplus on invisible trade.

The Chief Secretary to the Treasury (Mr. Norman Lamont): The fall in the United Kingdom's invisibles surplus in 1989 reflected a number of factors, including unusually high net contributions to the EC budget and high insurance payments following disasters in the United States.

Mr. McKay: Is not it clear to everyone that the trade in invisibles fell into deficit in the last quarter of 1989 due to the massive trade deficit and the need to keep interest rates high to finance that with hot money? Do the Government still believe that our manufacturing industry and the trade deficit hardly matter?

Mr. Lamont: The hon. Gentleman's question was about the invisibles deficit, not about manufacturing, which does not come into it. We had an invisibles surplus of £2·8 billion last year. It is true that they moved into deficit in the last quarter, for the reasons that I gave, but we are projecting a surplus on invisibles of £1·5 billion this year. I am pleased that at long last the Labour party is beginning to recognise the importance of invisibles and the service industries.

Sir William Clark: Does my right hon. Friend agree that our international security, particularly with overseas assets, is at an all-time high, giving confidence to overseas investors in Britain, in addition to which we have high reserves and can easily withstand any pressures on the pound?

Mr. Lamont: My hon. Friend is absolutely right. Our overseas investments are larger, as a proportion of GDP, than in any other country and last year our overseas assets appreciated in value by some £30 billion. That is a measure of Britain's financial strength and it greatly dwarfs all the points made by the Labour party about the deficit on the current account or on invisibles.

Mr. John Smith: As the Chief Secretary seeks solace in international comparisons, will he reflect that not only do we have the worst balance of payments deficit of any of the Group of Seven countries, but we have the highest rate of inflation and the highest interest rates? Does that show that Government policy is working?

Mr. Lamont: If the right hon. and learned Gentleman wants to make international comparisons, why does not he also point out that in the 1980s we had the highest growth of any major country in the EC, that we have the highest rate of investment of any country in the EC, that our manufacturing productivity has grown faster than that in any other major industrialised country and that our unemployment rate is two thirds of the EC average? The right hon. and learned Gentleman is a friend of every country but his own.

Save As You Earn

Mr. Wood: To ask the Chancellor of the Exchequer what representations he has received on his proposal to extend save as you earn to banks.

The Economic Secretary to the Treasury (Mr. Richard Ryder): The proposal responds to representations from the British Bankers Association and a number of individual deposit takers. It has been widely welcomed.

Mr. Wood: Has my hon. Friend been encouraged by the general response to my right hon. Friend's savings initiative? Does he believe that the biggest disincentive to savings is the fear of many potential savers that some future Government might devalue their savings, as happened under the previous Labour Government, all too disastrously for them?

Mr. Ryder: That is precisely what happened under the previous Labour Government, when we had negative real rates of interest. Small savers, particularly those nearing retirement age and the elderly, lost a great deal of money.

International Debt

Mr. Cryer: To ask the Chancellor of the Exchequer when he intends to respond to the Treasury and Civil Service Select Committee's report on international debt strategy.

The Financial Secretary to the Treasury (Mr. Peter Lilley): My right hon. Friend will be responding shortly.

Mr. Cryer: Will the Minister respond to the Committee by doing something that the Treasury has so far failed to do, and assist Third world debt, which in the major indebted countries is running at over $500 billion, by revoking the £1·9 billion tax concessions, using taxpayers' money, given to British bankers to service debts? As the Minister knows, that money goes not to the starving poor of the Third world, but into the pockets of shareholders of the big banks. When will he end this scandal?

Mr. Lilley: The hon. Gentleman may have noted the changes made in the Budget, which increased the relative attraction for banks to return debt to the indebted countries. I am sure that he will welcome that. He is wrong to say that the Government have done nothing to help with the debt problem of underdeveloped countries. Far from it. My right hon. Friend the Member for Blaby (Mr. Lawson) launched the sub-Saharan debt initiative, we have forgiven £1 billion of debt to the 27 poorest countries and the abolition of exchange controls ensures that more direct investment goes from the United Kingdom to underdeveloped countries than from all the other EC countries put together.

Mr. Paice: In terms of international debt, is not it also important for Britain not to continue to incur debt itself? Is not the reduction of our debt, to the extent that we are paying £2·5 billion less in interest, an effective move?

Mr. Lilley: My hon. Friend is right. The Labour Government left us with vast overseas debts and were the first Government of any major country to have to call in the International Monetary Fund, which should be helping poor countries in need. We shall ensure that that will be the case.

Mr. Chris Smith: Would not it be sensible to use the tax system not only to encourage the banks to make provision in their own accounts against Third world debt but to forgive debts to Third world countries? Even after the Budget changes, does not the present system provide an easy ride for the commercial banks but offer no real help to the struggling peoples and economies of the Third world?

Mr. Lilley: The hon. Gentleman is wrong. As I pointed out, and he half-acknowledged, the Budget has increased the relative attractions for banks to give back debt to debtor countries. If he or the Opposition have proposals retrospectively to withdraw relief that banks have been expecting, as all other commercial entities do, I am sure that the House would be interested to hear them.

Mr. Oppenheim: Does it strike my hon. Friend as strange and even inconsistent that Labour Members spend so much time complaining about the burden of debt in the Third world, when in the next breath they encourage the Government and the EC to erect yet more trade barriers, such as the multi-fibre arrangement, against Third world products? Such barriers prevent Third world countries from improving their living standards by selling us the products that they can best make.

Mr. Lilley: My hon. Friend is right. The under-developed countries most need access to two things—the markets and the capital of the developed world. Socialist policies would deny them both.

Mr. Cryer: On a point of order, Mr. Speaker. In view of the pathetically inadequate response to my question, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.

War Loan

Mr. Andrew F. Bennett: To ask the Chancellor of the Exchequer if he will announce a date for the redemption of war loan.

Mr. Norman Lamont: There are no plans to redeem 3½ per cent. war loan.

Mr. Bennett: That answer will disappoint at least one of my constituents. Are not there substantial numbers of people who either bought war loans or whose parents bought war loans that they have inherited and who believe that they have had a poor deal? Will the Government consider a scheme by which such people could redeem war loans rather than having to sell them at discounted prices?

Mr. Lamont: I am afraid that I cannot hold out hope for the hon. Gentleman. I stated what has been the policy of successive Governments. To redeem stocks now at par would cost a substantial amount of money and would lead to demands for redemption of other undated stocks. In most cases it would simply lead to windfall gains for those who purchased the stocks not at the original point of issue but after the price had fallen. I know that the hon. Gentlemen has been working hard on behalf of his constituents and has put forward ideas for distinguishing between some holders and others, but I am afraid that that would not be possible administratively.

Mr Tim Smith: Will my right hon. Friend confirm that the previous Labour Government issued the highest

coupon gilt ever, popularly known as "Healeys", and that it would be more sensible to repay those stocks which have a date and a high coupon rather than undated stock with a low coupon such as war loans? When did a Government last repay the national debt for three years in a row?

Mr. Lamont: My hon. Friend is right. I am not sure about his remarks about "Healeys", but he is certainly right in his general point about undated stocks, and I have given the hon. Member for Denton and Reddish (Mr. Bennett) the reasons why it is impossible to repay them.

Mr. Beith: As the Government make a virtue of repaying the public debt, why do not they give some attention to those who lend money in the particular circumstances of war and have held the stocks continually ever since? As those names must have been recorded, why is it impossible to repay those people?

Mr. Lamont: As I explained, large numbers of holders of war loans are not people who bought at the original price. As the hon. Gentleman knows, the stock lies at well below par. We would be giving a substantial capital gain, in particular to higher rate taxpayers and not to those who originally bought the stock. It is impossible to distinguish between those who bought the stock originally and those who hold it now.

Stamp Duties

Mr. Gerald Howarth: To ask the Chancellor of the Exchequer what representations he has received on his proposal to abolish all stamp duties on share transactions.

Mr. Lilley: The proposal to abolish stamp duties on share transactions has been widely welcomed.

Mr. Howarth: Does my hon. Friend agree that the abolition of stamp duty will be most advantageous to the 11 million shareholders in this country because it will reduce dealing costs to them, it is likely to extend wider share ownership in a way that Opposition Members fail to understand, and it will further enhance the City's leading role as the financial centre of Europe?

Mr. Lilley: My hon. Friend is right. It will benefit the 11 million direct shareholders—to the obvious disappointment of the Opposition—and all those people who are members of pension funds and have personal pensions or life assurance policies. They will benefit greatly, as will people who work in that much-expanding industry.

Pools Promoters

Mr. Kirkhope: To ask the Chancellor of the Exchequer what discussions he has had with the pools promoters about his Budget.

Mr. Tredinnick: To ask the Chancellor of the Exchequer what discussions he has had with the Football Trust about his Budget.

The Chancellor of the Exchequer (Mr. John Major): Following the Budget statement, officials met the Football Trust and the Pools Promoters Association to discuss implementation of the proposed reduction in the rate of pool betting duty. Both organisations welcome that and I am confident that they will meet the conditions for reducing the duty. Negotiations are proceeding to that end.

Mr. Kirkhope: Although I welcome the progress, will the requirements to distribute the funds according to the differing needs of clubs be met through the Football Trust? For example, at the moment Leeds United is storming back into the first division, where it belongs, but other smaller clubs such as Halifax, Huddersfield and even Stockport County may have different requirements which have to be met.

Mr. Major: I congratulate my hon. Friend on the success of Leeds United, and I look forward to seeing them lose at Stamford Bridge next year. The Football Trust is committed to a fair distribution of benefit and duty reductions according to the differing needs of clubs. It has also undertaken to account separately for the moneys received and distributed.

Mr. Tredinnick: I am most grateful to my right hon. Friend for his reply. We welcome that in Leicestershire and in particular in Bosworth. Will he give an undertaking that Leicestershire will be considered most carefully under those proposals?

Mr. Major: I assure my hon. Friend that the Football Trust will carefully consider comparative needs before distributing resources.

Mr. Tony Banks: As the Chancellor of the Exchequer is Chelsea football club's second best-known supporter, will he guarantee that he will declare an interest as Stamford Bridge could do with some of that additional money, and he and I could enjoy the additional facilities that would be provided?

Mr. Major: As the hon. Gentleman is undoubtedly Chelsea's best-known supporter, perhaps we should declare a joint interest.

Mr. Skinner: The Chancellor said that the reduction in duty will be granted to those in need on the basis of ability to pay. If he can do that for the football pools, why cannot his right hon. Friends do it for the poll tax? As some of those football clubs are owned by very wealthy people, will he make sure that the Government are not bailing out people such as Robert Maxwell and his friends?

Mr. Major: There are some temptations that even I can resist. The hon. Gentleman's ingenuity stretches matters a little far when he refers to the community charge. But the Football Trust made it clear that it is entirely committed to a fair distribution of benefit and duty reductions and I am confident that that will be achieved.

Dr. Marek: The Chancellor will be aware that the Government have designated as international grounds Wembley, Roker Park and a ground in Belfast. Those grounds will require extra money because they have extra commitments. Why have not the Government designated any ground in Wales for international status?

Mr. Major: I am not sure whether that is a matter for the Government and I am certain that it does not arise on this question.

Tax-exempt Special Savings Accounts

Mr. John Greenway: To ask the Chancellor of the Exchequer what representations he has received about TESSA.

Mr. Major: This innovative proposal has been widely welcomed.

Mr. Greenway: The explosion of credit in recent years has not been matched by a similar growth in personal savings. Does my right hon. Friend agree that tax concessions can play an important role in encouraging individual savers, and that is why the TESSA scheme and the abolition of the composite rate have been so warmly welcomed? Does he agree that it is important to promote that new scheme next year to people who do not save now so that there will be a growth in savings and not simply a replacement of other deposits to take advantage of that valuable tax concession?

Mr. Major: My hon. Friend makes an important point. There will certainly be an element of dead weight cost in the new scheme, as I acknowledged from the outset, but I hope that it will be widely promoted to encourage people who at present do not save to do so. That would be wise economically and socially.

Mr. Boateng: Will the Chancellor step back for a moment from the paean of self-congratulation on TESSAs and reflect on their impact on the competitive position of friendly societies, which have made such a considerable contribution over the years to encouraging the very small savers whom we want brought into savings schemes? Will he consider raising the exempt limit on deposits for friendly societies, and will he legislate at an early date and bring into force the recommendations in the Green Paper? We do not want Green Papers alone, we want action.

Mr. Major: Green Papers need to be considered. As for friendly societies, the hon. Gentleman will be aware of the measures in the Budget, to which I have nothing to add at present.

Interest Rates

Mr. Alfred Morris: To ask the Chancellor of the Exchequer how many letters he has received from small businesses about the level of interest rates.

Mr. Major: A small number each month.

Mr. Morris: Will the Chancellor explain to people who run small businesses how a rise of over 100 per cent. in the number of firms going into receivership caused, they say, largely by the Government's policies of high interest rates and the uniform business rate, helps Britain prepare for the challenge of 1992? If a doubling in the number of firms going bust was not the purpose of those policies, will he now at least urgently address himself to their undoubted effects?

Mr. Major: The most crucial element of all for 1992 is to make sure that by then we have a competitive economy and much lower inflation than at present. That is the purpose of the Government's present monetary policy. The right hon. Gentleman quotes the number of companies going into receivership; he might equally have quoted the net number of new companies which is running at a record level of 1,300 each week.

Mr. Ian Stewart: Will my right hon. Friend assure the House that whatever representations may be forthcoming


from business, he will not consider reducing interest rates until it is clear that inflationary and monetary pressures are at last abating?

Mr. Major: I am entirely content to give my right hon. Friend that assurance.

Mr. Radice: Has the Chancellor noted the Treasury and Civil Service Select Committee report that was published today, in which we say that the level of interest rates has a major impact on the timing and level of investment? Is not there a case for the Government not to rely so exclusively on interest rates in managing the economy?

Mr. Major: The hon. Gentleman will also be aware that interest rates are a powerful counter-inflationary weapon. It is precisely for that purpose that we believe that monetary policy is so important. I must echo to the hon. Gentleman what I affirmed to my right hon. Friend the Member for Hertfordshire, North (Mr. Stewart): interest rates will have to remain high until I am confident that inflation is on a downward trend.

Mr. Burt: Does my right hon. Friend recognise the damaging connection between high public expenditure and interest rates? In particular, does he share my concern about the impact of high local authority expenditure on public expenditure generally? I am sure that he will have noticed that the high-spending authorities are Labour controlled. Does he share my worry about the impact on interest rates in the future if a party that is committed to high local expenditure should again get its hands on the Treasury?

Mr. Major: I entirely share my hon. Friend's view. That matter will he watched carefully in the coming months. It is essential that we retain firm control of public expenditure which we intend to do.

Mrs. Beckett: Does the Chancellor recognise that the danger that most people, particularly in small businesses, fear is not that he will prematurely lower interest rates but that he will shortly raise them again? Will he reconsider the use of increased interest rates as the sole instrument of policy, particularly in the light of the recent Bundesbank report which showed that across the major economies of the world credit controls play a useful, if minor, role as a direct alternative to the use of interest rates alone? Will he assure the House that he is not waiting until 4 May to increase interest rates?

Mr. Major: I am not entirely sure that the hon. Lady carried all her hon. Friends with her in every aspect of her question, which she founded on a misconception. Monetary policy is backed by fiscal policy, and must remain so.

Composite Rate Tax

Mr. John Marshall: To ask the Chancellor of the Exchequer how many people he anticipates will benefit as a result of his abolition of composite rate tax.

Mr. Lilley: An estimated 14 million people will benefit from the abolition of composite rate tax.

Mr. Marshall: May I thank my hon. Friend for listening to the representations that I and others made? As

all those 14 million people are small savers, the change will be welcomed by many people other than the immediate beneficiaries.

Mr. Lilley: I am grateful for my hon. Friend's opening remarks. His representations, along with those of others, played a part. Some 5 million women, 4 million pensioners, 2½ million other adults and 2½ million children will benefit from the removal of that unfair form of taxation on small savers.

Value Added Tax

Mr. Pawsey: To ask the Chancellor of the Exchequer how many businesses he expects to be helped by his proposed value added tax reforms.

Mr. Ryder: About 1,150,000 businesses should be helped by the proposed new scheme for relief from VAT on bad debts, and most of the 250,000 or so businesses that register each year could benefit from the simplified VAT registration requirements.

Mr. Pawsey: I thank my hon. Friend for that helpful response. As a former managing director, I know only too well—[HON. MEMBERS: "Hear, hear."] Those were the days when I was gainfully employed. Bad debts are bad news; they go straight to the bottom line and adversely affect the balance sheet. I therefore welcome unreservedly my right hon. Friend's Budget changes, which will substantially help companies. I wonder whether I might pursue one matter with my hon. Friend—[HON. MEMBERS: "No."]

Mr. Speaker: Order. One question is the ration.

Mr. Pawsey: I have not actually asked the question yet, Mr. Speaker. I should like to ask my hon. Friend to elaborate on the figures that he announced at the end of his answer. Did I hear him say that there were 250,000 new registrations each year?

Mr. Cryer: Will the hon. Gentleman give way?

Mr. Pawsey: How does that compare with the last year of the last Labour Government?

Mr. Ryder: I thank my hon. Friend for his kind remarks about my right hon. Friend the Chancellor's Budget. My hon. Friend is right also to give thanks to the imaginative set of Budget proposals to help small and growing businesses which my right hon. Friend introduced on 20 March. My hon. Friend is looking for a figure. Under this Government, more than 1,300 small businesses start up each week. In the last year of the Labour Government, there was a loss of 100 per week. I do not think that the hon. Member for Bradford, South (Mr. Cryer) was the Minister with responsibility for small businesses at the time because he had resigned. Nevertheless, there was a net loss of 100 a week.

Mr. Nicholas Brown: Very quickly, before the Prime Minister comes in, will the Minister give the House an assurance that the Government will not extend VAT before the next general election?

Mr. Ryder: The hon. Gentleman was on the Standing Committee that considered last year's Finance Bill and he has held his job for a long time. He knows perfectly well


that the Government's position with regard to VAT has been set out on countless occasions from the Treasury Bench. There is no change whatever in those views.

Mr. John Townend: The small business lobby is grateful to the Government for the changes made by the Budget, but will my hon. Friend go a little further in respect of bad debts? Bad debts are bad debts when they become bad debts. No small business man writes off debts that are not bad. It seems an onerous requirement for a small business man to have to wait two years to get relief from VAT. Will my hon. Friend promise to reduce that period?

Mr. Ryder: Doubtless we shall have an occasion to debate that matter when the subject of bad debt relief comes before the House—perhaps in a Committee of the whole House on the Finance Bill. I look forward to debating the matter further with my hon. Friend then.

Group of Seven

Mr. Yeo: To ask the Chancellor of the Exchequer when he last met the Finance Ministers of the Group of Seven countries; and what subjects were discussed.

Mr. Ryder: My right hon. Friend met his counterparts in the other Group of Seven countries at a G7 meeting in Paris on 7 April. Along with the central bank governors of the G7 countries, they reviewed economic policies and prospects in their countries, reaffirmed the need for close co-operation of macro-economic and structural policies, and discussed recent developments in financial and exchange markets and the impact of events in eastern Europe.

Mr. Yeo: Given the regular, strenuous efforts by the Opposition to rubbish the achievements of management and workers in British manufacturing industry, can my hon. Friend tell us which country out of Britain, France and Germany achieved the highest rate of growth in manufacturing output and manufacturing productivity throughout the 1980s?

Mr. Ryder: Not only did manufacturing output and manufacturing productivity grow faster in the 1980s in Britain than in the other two countries, but growth of British investment between 1980 and 1988 was also faster.

Mr. Robert Sheldon: The Chancellor would surely have discussed the balance of payments with the other Finance Ministers. If so, he would have explained why our invisibles surplus has disappeared and understood that the high interest rates required to bring in that hot money from abroad are the price that we have to pay in terms of manufacturing industry suffering and high mortgage interest rates. The sooner the Chancellor brings that policy to an end, the sooner we can find other means of satisfying the demands of British industry.

Mr. Ryder: The right hon. Gentleman is correct to say that balance of payments issues were discussed at the G7 meeting in Paris on 7 April, and a paragraph reference is made to them in the communiqué. The right hon. Gentleman overlooks the fact that, as my right hon. Friend the Chief Secretary said earlier, the last set of British invisibles figures were erratic in so far as they took into account higher than usual contributions to Europe

and the higher than usual contributions that we had to make as a result of the hurricanes in the West Indies and the United States.

Mr. Budgen: Did my hon. Friend tell the Finance Ministers of the G7 countries that since Britain attempted to shadow the Deutschmark in 1988 this country has learnt a terrible lesson about the dangers of attempting to rig exchange rates?

Mr. Ryder: As far as I know, that particular matter was not discussed at the G7 meeting in Paris on 7 April. Had it been discussed, however, my right hon. Friend would have pointed out that not only the pound but several other currencies have fallen against the Deutschmark.

Third World Debt

Mr. Allen: To ask the Chancellor of the Exchequer what assessment he has made of the impact of his interest rate policies on Third world debt.

Mr. Lilley: Sterling interest rates have relatively little impact on developing countries as less than 5 per cent. of their debt is denominated in sterling and some of this will be at fixed or concessional rates.

Mr. Allen: Is the Minister aware that Japan's economic problems will mean that that country will be keeping more of its surplus capital at home and that German reunification will mean the same for Germany, the other major lender in the world? Where will the major debtor nations, of which Britain and the United States are among the most prominent, get their hot money from? Will not it be from the Third world nations, which are already suffering a net outflow of capital?

Mr. Lilley: No, I do not think so. There are vast quantities of money in the world ready to go to countries where there are excellent investment opportunities, as there are in the United Kingdom.

Mr. Andrew Mitchell: Have not the Government made a particular contribution to assist Third world countries faced with that problem by converting a large amount of Government debt into grant? Is not that particularly true in respect of sub-Saharan Africa?

Mr. Lilley: My hon. Friend is absolutely right. The Government have forgiven some £1 billion of debt to the 27 poorest countries. That was the right thing to do and will be welcomed on both sides of the House.

Exchange Rate Mechanism

Mr. Frank Field: To ask the Chancellor of the Exchequer when he expects the Madrid conditions for exchange rate mechanism participation to be satisfied.

Mr. Major: In due course.

Mr. Field: Do the Government believe that all the conditions for entry, including those related to inflation, will be met by next year?

Mr. Major: We must wait and see, but when the conditions are met we shall join the exchange rate mechanism.

Mr. Latham: What specific features of the Bretton Woods agreement were so successful that we should want to recreate them now?

Mr. Major: I think that we now find ourselves in a different set of circumstances, in which a greater degree of exchange rate stability would be extremely useful for everyone.

Bad Debts

Mr. John Townend: To ask the Chancellor of the Exchequer what representations he has received on his plans to help traders with bad debts.

Mr. Ryder: I think that my hon. Friend has already asked his question; nevertheless, I shall answer it again. During the comprehensive review of the arrangements for relief from VAT on bad debts, the views of professional and business bodies were sought, and many representations received.

Mr. Townend: I am sure that you, Mr. Speaker, will be pleased to hear that I do not propose to ask the same question again. Does my hon. Friend agree that as dangerous to small businesses as had debts are debts which are paid slowly and that some of the worst culprits are local and public authorities? What efforts can he make to encourage public authorities, including the Government, to pay their debts to small businesses a little more quickly?

Mr. Ryder: I fully agree with my hon. Friend and efforts are being made to ensure that those things are put right as soon as possible.

VAT

Mr. Donald Thompson: To ask the Chancellor of the Exchequer how many businesses he expects to be helped by his proposed value added tax reforms.

Mr. Major: About 1,150,000 businesses should be helped by the proposed new scheme for the relief from VAT on bad debts and most of the 250,000 or so businesses that are expected to register in a year could benefit from the simplified VAT registration requirements.

Mr. Thompson: With the rapid increase in the number of businesses in my constituency and throughout the United Kingdom, what steps is my right hon. Friend taking to ensure that businesses which grow to VAT level understand their responsibilities?

Mr. Major: I think that the small business sector in recent years has shown that it understands its responsibilities very well. It will also react favourably to the fact that we have the most generous tax structure for small businesses of any country in the European Community.

Price Increases

Mr. Lambie: To ask the Chancellor of the Exchequer what is his estimate of how much in combination the increases in electricity, gas, water charges, mortgage repayments and the poll tax will cost, in 1990–91 as against 1989–90, a family on average earnings with two children.

Mr. Ryder: It is not the practice to provide forecasts of interest rates. However, the announced increases in gas, electricity and water rates, together with the community charge, are estimated to add over 1 percentage point to the RPI inflation rate in 1990–91.

Mr. Lambie: As the figures given today make nonsense of the Government's claim to be conquering inflation., is the Chancellor of the Exchequer now prepared to revise the estimates of inflation given in the Budget for the end of the year 1990?

Mr. Ryder: No, we are not.

Mr. Ian Bruce: Does my hon. Friend agree that over the next decade the prices of those particular commodities are likely to have to rise because of problems associated with the environment and the bringing in of greener policies? Does he also agree that it is arrant nonsense for Opposition Members to ask for green policies and then complain about the price of those policies?

Mr. Ryder: As my hon. Friend knows, those matters are being considered in the White Paper being prepared by my right hon. Friend the Secretary of State for the Environment. With regard to the Opposition's green policies, the hon. Member for Islington, South and Finsbury (Mr. Smith) brought out a short paper on that issue just before the Budget. Doubtless the Opposition Front Bench will table amendments to our various proposals in the Budget during the passage of the Finance Bill, the Committee stage of which we expect to begin in a fortnight's time.

Training and Enterprise Councils

Mr. Tracey: To ask the Chancellor of the Exchequer what representations he has received from employers' organisations on his proposals to assist TECs.

Mr. Lilley: The measures announced in the Budget to provide tax relief for business contributions to TECs have been widely welcomed by a number of employers' organisations.

Mr. Tracey: I am sure that my hon. Friend will accept my view that the training and enterprise councils are the best possible means of improving training in our respective areas. We have a thriving TEC starting up in my borough of Kingston upon Thames. I hope that my hon. Friend will consider other means of assisting TECs in future.

Mr. Lilley: I entirely agree with my hon. Friend. The development of training and enterprise councils is extremely important because they harness the private sector and the public sector to improve training, which is one of our most important objectives. The Opposition pay lip service to that objective, but in general they oppose every constructive measure that the Government introduce.

Mr. Fatchett: Given the cuts in training budgets announced in the Government's expenditure White Paper, does the Financial Secretary envisage that business will be expected to fill the gap in those budgets? What will happen to the voluntary organisations providing training for people with special needs, for which budgets are being cut


at the moment? Will they have to face those cuts themselves or will business, and passing the hat round, be expected to save that important training work?

Mr. Lilley: Business is responsible, and recognises that it is primarily responsible, for training people and it has increased substantially the amount that it spends on training. It has been able to do that because of the improved profitability of British industry. I believe that it is far better to rely on that than to do everything through the state. I am certain that British industry does not want a payroll tax to be imposed. The Opposition have been proposing such a tax vigorously, although they now seem to be getting cold feet. I am sure that the House would like to know whether the Opposition are going to renege on that policy proposal.

Interest Rates

Mr. Latham: To ask the Chancellor of the Exchequer whether he will make a statement on the level of interest rates.

Mr. Ryder: Bank rates are set at 15 per cent.

Mr. Latham: In view of the serious recession in the construction industry and the significant downturn in retail sales, will my hon. Friend confirm that nothing in the underlying features of the British economy would require a rise in interest rates?

Mr. Ryder: Interest rates will remain as high as is necessary for as long as is necessary to bear down on inflation. My right hon. Friend the Chancellor reserves the right if need be to raise interest rates, just as he reserves the right to get them down.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Callaghan: To ask the Prime Minister if she will list her official engagements for Thursday 26 April.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Callaghan: Is the Prime Minister aware that the report of the Select Committee on Education, Science and the Arts on teacher shortages, pay and conditions has been suppressed for almost a year? As the report is not to be published until after the local elections, will the Prime Minister tell the House what she and her Conservative colleagues on the Select Committee are afraid of?

The Prime Minister: We are very proud of our record with regard to teachers' pay, compared with that of the previous Labour Government. By 1 January 1991, teachers' pay will have risen by 50 per cent. on average in cash terms since March 1986. My right hon. Friend the Secretary of State for Education and Science is implementing the interim advisory committee's recommendations. That will mean very substantial rises for all teachers, particularly for experienced teachers and for

those who are new to the profession. Heads and deputies will receive increases of up to 12·2 per cent. It is a good record.

Mr. Hayward: My right hon. Friend will have received many representations in the past 12 months about alternatives to the community charge. Was not the most callous unveiled yesterday in Scotland, when there was a proposal which made no allowance for rebates for pensioners, the sick, or the unemployed? [HON. MEMBERS: "Rubbish."] That proposal was outlined by the hon. Member for Glasgow, Garscadden (Mr. Dewar) yesterday. [Interruption.]

The Prime Minister: My hon. Friend makes—[Interruption.]

Mr. Speaker: Order. I am not responsible for what the hon. Member said. It is a matter for him. I call the Prime Minister.

The Prime Minister: My hon. Friend makes his own point very effectively—[Interruption.]

Mr. Speaker: Order. This is disgraceful behaviour.

The Prime Minister: The policy of the Opposition which I would criticise is the roof tax, which would bear particularly heavily on all those in council houses who, having purchased their houses at a very generous discount, would find themselves with a very high actual charge—the roof tax—on the up-to-date valuation of their houses.

Mr. Molyneaux: Is the Prime Minister aware that, whatever may be said by politicians in Europe, including some in this House who should know better, there is widespread support throughout the United Kingdom for her defence of Britain's status as a nation state in all respects?

The Prime Minister: I am very grateful for the right hon. Gentleman's question. I agree that most people wish to be absolutely certain that they will continue to have their own head of state or monarchy—half of them are monarchies in Europe—their own parliamentary institutions and other institutions, and that we should be accountable to them.

Mr. John Townend: Is my right hon. Friend aware of the growing anger among the general public at the enormous cost of the recent prison riots, which will have to be paid by the taxpayer? Will she give an assurance that it will not be allowed to happen again that in any future incident control of the prison will be taken immediately and that whatever course is necessary will be used, be it the SAS, tear gas or arms, and that the Government will not be deterred by fear of convicts being injured?

The Prime Minister: The matter of cost will be discussed with the Home Secretary. Although it is normally expected that the police themselves meet from their grants the costs of ordinary policing, that will be further discussed with the Home Secretary. As for the timing of what happened, I think it right that the decision should be left to those on the spot, in conjunction with consultation with the Home Office. It is not for us to second guess the decisions that were made.

Private Office

Mr. Dalyell: To ask the Prime Minister what guidelines she has set out to enable her private office civil servants to ensure that the appropriate distinction is maintained in the handling of party business and official business.

The Prime Minister: Civil servants in my private office observe the same guidelines as other civil servants.

Mr. Dalyell: In that case, what were the facts of Mr. Powell going to see Mr. Black about the position of Mr. Hastings? Is it quite proper that a civil servant should go to see a newspaper proprietor about the position of an editor?

The Prime Minister: I would not accept all that the hon. Gentleman says or his interpretation of it. Civil servants in my private office have served Governments of both political complexions with great efficiency, conscientiousness and professionalism. That is a great strength of our system, and it is understood that we do not normally attack people in this House where they cannot answer back. I am certain that they will continue to carry out their duties in the highest spirit of conscientiousness and professionalism.

Mr. Allason: My right hon. Friend will be aware that Mr. Dennis Payne, who recently conducted an investigation into leaks from Downing street, has given a lengthy interview to Thames Television, for broadcast this evening, which is being considered by the Independent Broadcasting Authority. Does she consider that to be appropriate? Will she give serious consideration to the IBA banning the broadcast on the ground that Mr. Dennis Payne had not been given permission to make those disclosures?

The Prime Minister: If any people have given interviews to television as civil servants, they have cleared it with the Cabinet Secretary, who is head of the Civil Service. Matters concerning the IBA are for the IBA to reply on and not for me.

Mr. John Garrett: Why have the Government redefined the duty of a civil servant? The duty and loyalty of a civil servant has always been to the Crown. The head of the Civil Service has now announced that the duty and loyalty of a civil servant is to the Government. What fear or ambition has led the right hon. Lady to approve that constitutional change?

The Prime Minister: The hon. Gentleman is not correct. The duties under the previous Cabinet Secretary were reissued, very substantially in the same form as previously, as the hon. Gentleman will find if he goes through them. Those duties are of course to the state, which means that they must serve the Government of the day.

Mr. Dalyell: On a point of order, Mr. Speaker. In view of the nature of the Prime Minister's reply, I beg to give notice that I shall endeavour to raise the matter on the Adjournment.

Engagements

Mr. Soames: To ask the Prime Minister if she will list her official engagements for Thursday 26 April.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Soames: May I return my right hon. Friend to the mutiny at Strangeways prison? [HON. MEMBERS' ``Yes."] Having regard to the earlier answer that she gave, may I ask if she is aware that there is a significant body of public opinion in Britain which cannot understand why the recapture of the prisoners should have been allowed to take such a long time? Will she reassure the House that the prison service will get whatever equipment it says that it needs to control riots in prisons?

The Prime Minister: I shall return for a moment to the subject of the Strangeways riots. I said previously that I thought that we could not second guess the decision of those on the spot in consultation with the Home Office. It would be mistaken hindsight for us each to express our views without having been on the spot at the time.
Like my hon. Friend the Member for Crawley (Mr. Soames) and my right hon. and learned Friend the Home Secretary, I am glad that the disturbances have ended. My right hon. and learned Friend will be making a full statement on those disturbances immediately after Question Time. In the past few days, the Home Office has placed orders for an extra £750,000 worth of equipment and clothing for the personal protection of officers who may have to deal with prison disturbances. My right hon. and learned Friend will be giving further details later.

Mr. Kinnock: In view of yesterday's further evidence of the appalling balance of payments position, what changes does the Prime Minister intend to make in her economic policies?

The Prime Minister: The Government have no changes to make in their economic policies. In view of the right hon. Gentleman's question, I hope that we shall receive his support in trying to keep down unit labour costs and, therefore, that he will not support every increase in pay which is unrelated to productivity.

Mr. Kinnock: I remember when the Prime Minister used to think that unit labour costs were a matter of market movement and not a matter for politicians. Does she realise that Britain now has the highest inflation and the lowest growth rate of any of the major industrialised countries? Is she aware that it is now three years since the last time we had a monthly balance of payments surplus? Is she willing to recognise that no Government have ever had it so wrong for so long, and does she not owe it to the country to change from her disastrous policies?

The Prime Minister: I am interested that the right hon. Gentleman thinks it so wrong to have the highest number of jobs that there have ever been in this country's history. That is the basis of the people's prosperity. I am also interested that he thinks it so wrong to have the highest level of capital investment in manufacturing industry, and the highest output. We think that that is a good basis for the future.

Mr. Bill Walker: Has my right hon. Friend noticed that in the second year of the community charge in Scotland


local authorities' expenditure programmes are largely within the rate of inflation and that 20 of them have expenditure programmes at about the same level or below the level the previous year? Does not that show clearly that the community charge is working? [Interruption.] Oh yes, it is. More importantly, those people in Scotland who have paid their community charge have little sympathy for those who can pay but refuse to pay, such as the provost of Angus district who is now using his community charge money to run around in a car which is not paid for by himself?

The Prime Minister: What my hon. Friend is suggesting is that in the first year of the community charge local authorities try to increase their expenditure and blame the community charge instead of themselves, but in the second year they cannot do that and may therefore be more conscientious in trying to curb their expenditure. The community charge law was passed by the House and, like all laws, it should be observed by all honourable citizens.

Mr. Wray: To ask the Prime Minister if she will list her official engagements for Thursday 26 April.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Wray: Will the Prime Minister kindly apologise for the attack that she made on the Scottish people when she said that they were subsidised by the tolerant English? Will she also make it clear that although when the poll tax was

being implemented in Scotland and her advisers' answer was yes, yes, yes, the answer from the heartbeat of Glasgow and all Scotland is no, no, no?

The Prime Minister: As for the practical part of the hon. Gentleman's question, he will be aware that the community charge in Scotland meets only one fifth—20 per cent.—of local government expenditure. The community charge in England meets 30 per cent. of local government expenditure. We in England would very much like to have the same proportion of grant as Scotland enjoys.

Mr. Barry Field: Does my right hon. Friend agree with the awful historical statistic that, of the 800 Isle of Wight riflemen who were sent to reinforce the beach head at Gallipoli, only 180 returned without injury?

Dr. Godman: Take your hands out of your pockets.

Mr. Field: Does my right hon. Friend agree that that statistic is the best reason why we should have a strong NATO, supported by an excellent military ally such as Turkey, and that we should modernise our nuclear deterrent, and is notit a timely reminder of the unity that the Commonwealth gives us in adversity?

The Prime Minister: Yes, I agree with my hon. Friend. It is particularly noteworthy that when we were celebrating the 75th anniversary of the Gallipoli landings we did so with Turkey as a main ally of this country. Both of us believe staunchly that NATO provides us with a sure defence against such things happening again.

Business of the House

Dr. John Cunningham: Will the Leader of the House tell us the business for next week?

The Lord President of the Council and Leader of the House of Commons (Sir Geoffrey Howe): The business for next week will be as follows:
MONDAY 30 APRIL—Progress on remaining stages of the Environmental Protection Bill.
TUESDAY I MAY—Second Reading of the Finance Bill.
WEDNESDAY 2 MAY—Completion of remaining stages of the Environmental Protection Bill.
Consideration of Lords amendments to the pensions (Miscellaneous Provisions) Bill.
THURSDAY 3 MAY—Proceedings on the Australian Constitution (Public Record Copy) Bill.
Motion to take note of EC documents relating to education and training. Details will be given in the Official Report.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
FRIDAY 4 MAY—Private Members' Bills.
Thereafter the House will adjourn until Tuesday 8 May.

[Thursday, 3 May 1990:


Relevant European Community Documents:


(a) 4432/90
Trans-European Mobility Scheme for University Students (TEMPUS)


(b) 4431/90
European Training Foundation

Relevant Reports of European Legislation Committee:

(a) HC 11-xiii (1989–90), para 1
(b) HC 11-xii (1989–90), para 1]

Dr. Cunningham: Is the Leader of the House able to assure us that when the House deals with the Environmental Protection Bill on Monday the Government will not prevent it from having adequate time in which to debate an amendment to introduce a dog registration scheme in Britain? Does the right hon. and learned Gentleman recall that, when the matter last came before the House, it was debated in the early hours of the morning and that it was defeated by a majority of only 13, due to the fact that the Government brought in the payroll vote? Does he think that Conservative Members are entitled to a free vote on the matter? There would then be an honest decision, which would almost certainly lead to the introduction of a dog registration scheme for which there is great—

The Parliamentary Secretary to the Treasury (Mr. Tim Renton): The matter should be discussed through the usual channels.

Dr. Cunningham: Yes, I am willing to discuss, through the usual channels, the possibility of a free vote, if the Government are willing to give that undertaking. I am sure that the hon. Member for Plymouth, Drake (Dame J. Fookes) would welcome the opportunity of a free vote on the Government side. So would people in the country, as there is widespread concern about the threat that dogs pose to people's health and well-being.
Will the Leader of the House provide Government time soon for a debate on the important issue of the Iraqi gun affair? Is not it clear from letters from Ministers in the

Northern Ireland Office to my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) that the Government have known for a considerable time of Iraqi involvement in ballistics production and related matters? Has the Leader of the House seen a copy of the letter of 16 October 1989, signed by a member of the Government, which makes it clear that the Foreign and Commonwealth Office had advised of the involvement of Iraqi-hacked companies in a consortium involving itself in ballistics matters? A Foreign and Commonwealth Office Minister said in a letter:
Iraq was known to be involved in an advanced ballistic missile development programme".
Is not it time that the House had clear and candid answers on those matters? Is not it incumbent on the Leader of the House to ensure that his ministerial colleagues from the Department of Trade and Industry and from the Ministry of Defence come to the House to answer the legitimate and urgent questions which hon. Members of all parties want to put to them?

Sir Geoffrey Howe: The hon. Gentleman will realise that there is room for more than one view on the merits of a dog registration scheme. We have seriously to consider whether it would be the best way of advancing the concern shared by hon. Members of all parties to deal with stray and dangerous dogs. It should be possible to find room in the ordinary treatment of the many new clauses and amendments tabled for debate next week to discuss the scheme. That will be facilitated if the hon. Gentleman and his hon. Friends can approach those matters with due expedition so that there is a chance of dealing with them according to their importance.
On the particular case that has interested the House in recent days, in the light of the charges laid against an individual yesterday and of the continuing investigations by Customs and Excise, it would be inappropriate to give further information. On the wider question of arms supplies to Iraq more generally, no doubt the hon. Gentleman and his party can consider raising the matter in the course of debate.

Mr. Terence L. Higgins: My right hon. and learned Friend will be aware that the Liaison Committee feels strongly that the departmental nature of the Select Committee system should be maintained. Representations have therefore been made to him that the Select Committee on Social Services should be divided to correspond with the ministerial and departmental relationship. Has my right hon. and learned Friend been able to make progress on that? I hope that he will be able to do something about the matter next week.

Sir Geoffrey Howe: As my right hon. Friend knows, the matter that he raised has been discussed through the usual channels. Arrangements are now fairly advanced in that respect and I hope that they can be finalised before too long.

Mr. Jim Sillars: Will the Leader of the House make a special arrangement next Wednesday to transfer Scottish Question Time from here to the Scottish Grand Committee in Edinburgh, to be followed by a full day's debate in the Scottish assembly rooms in Edinburgh on the Labour party's roof tax? Is the Leader of the House aware that yesterday, in Glasgow and not here in debate, a statement was made by the hon. Member for Glasgow, Garscadden (Mr. Dewar), the shadow Secretary of State


for Scotland, in which he gave a figure and then had to tell the press conference that he could not relate that figure to the value of any particular house and, more important, nor could he explain to council house tenants how their houses were to be valued and how the roof tax was to be levied on them? The conclusion is that the Labour party is in an extremely muddled state. Can I persuade the Leader of the House to accept my suggestion so that we can have a debate in Edinburgh and the matter can be straightened out?

Sir Geoffrey Howe: I have to take care in handling radical proposals for constitutional reform from the hon. Gentleman. I agree that in respect of this matter, there is much to be said for publicising his points to the people of Scotland as widely as possible. The Labour party's taxation proposals for Scotland would lead to Scotland becoming probably the most heavily taxed part of the United Kingdom. The roof tax proposals have been widely condemned in Scotland—and rightly so.

Mr. Bill Walker: Will my right hon. and learned Friend give deep consideration to the reply that he has just given? There is no question but that Scottish Members of all parties would like an early opportunity to debate the Labour proposals for Scotland and, of course, the proposal for a local income tax. They would also like to have the opportunity to debate the practices of many who are in receipt of public support in different ways, such as the provost of Angus district council, who is running around in his official car, trying to be a martyr, on funds paid for by the community charge payers in my constituency.

Sir Geoffrey Howe: I am grateful to my hon. Friend for reinforcing that point of view about the Labour party's proposals and I am glad to facilitate this brief debate about that matter in the House today.

Mr. Robert Hughes: Will the Leader of the House arrange for at least a statement, if not a debate, on the Health Service in Scotland? Is the right hon. and learned Gentleman aware that I have learnt today about dramatic cuts amounting to more than £1 million in the finances of the Grampian health board, which the board says are totally unforeseen and wholly the result of Scottish Office calculations? Is the right hon. and learned Gentleman further aware that such treatment is intolerable and unprecedented and is much worse than anything that I have ecountered in 20 years as a Member of the House? Will he therefore arrange for a statement, because other health boards might also be affected? Does the right hon. and learned Gentleman agree that this matter demonstrates beyond peradventure that it is an absolute disgrace that we do not have a Select Committee on Scottish Affairs in which we can discuss such matters in detail and arrive at proper remedies?

Sir Geoffrey Howe: The Health Service in Scotland has received sustantially the same increases in financial resources as the Health Service in the rest of the kingdom. However, if the hon. Gentleman wishes to raise that point, he may try to do so in a debate on the Adjournment.

Mr. Teddy Taylor: Will the Leader of the House find time either on Thursday or at 10 pm on

Tuesday to discuss the vital automobile order that we shall be discussing some time in the early hours of tomorrow when nobody will be here? After yesterday's balance of payments figures and bearing in mind the desperately important proposals in those plans to curb British exports to the continent, does the Leader of the House accept that they deserve detailed consideration by a full House at a reasonable hour? Will he make a special effort to ensure that this vital Euro order, which will affect hundreds of thousands of our constituents and their jobs, is not discussed at a crazy hour tomorrow morning when nobody will be here?

Sir Geoffrey Howe: I do not doubt the importance of the automobile industry and the provisions affecting it that derive from, among other matters, the European Community. My hon. Friend is aware that we are considering wider proposals affecting the way in which the House considers European Community documents.

Dr. John Reid: Will the Leader of the House arrange for a statement on the steel industry? Does he accept that the House cannot abandon its responsibilities for the social and economic consequences of any decline in that industry just because it has been privatised? Is the right hon. and learned Gentleman aware that since the last statement on the industry was made to the House by the then Minister for Trade and Industry on 3 December 1987, there have been continuing doubts in Scotland about the validity of the guarantees that were given? That has now reached a crescendo. Is such a statement likely to be forthcoming in the near future?

Sir Geoffrey Howe: Arrangements for debates and statements about industries that were formerly in public ownership must take a different form when the industry has been privatised. That is inevitable. However, there is no objection to such matters being raised either in questions or during an Adjournment debate.

Mr. Roger Knapman: Will my right hon. and learned Friend make Monday week the last May Day bank holiday, but please replace it with something else?

Sir Geoffrey Howe: I am aware that that point of view is widely shared.

Ms. Dawn Primarolo: I wish to raise with the Leader of the House the way in which the press report voting in Divisions. I refer specifically to the reports of our voting that were published in the national dailies today in which the press reported only the Division lists and did not record the Tellers. That led to an erroneous report of the way in which I voted during the abortion debate, which has caused considerable hardship and work. This is not the first occasion that this has happened to an hon. Member, so I ask the Leader of the House to issue guidelines to the press on the reporting of Divisions that would ensure that members of the press have all the facts before they print the names of those who voted in any Division.

Sir Geoffrey Howe: My responsibilities do not extend to the way in which the press report the proceedings of the House. I understand the point raised by the hon. Lady. The names of the Tellers for the Divisions at the end of Tuesday's debate were fully reported in the Official Report, as one would expect, and that is where one would look for such information. Neither I nor the House has any control


over how the press report these matters, but I have no doubt that they will respond to the point made by the hon. Lady.

Mr. Tim Devlin: Would my right hon. and learned Friend care to comment on the invasion of the plastic embryos on Monday morning, most of which are now on their way to biology classrooms around the counry, in the light of Mr. Speaker's remarks in the House on Monday afternoon at the beginning of business?

Sir Geoffrey Howe: I have been looking into the matter raised by my hon. Friend earlier in the week. It is true that the delivery of those objects caused considerable distress to a number of Members, and particularly to some of their secretaries and other female members of staff. However, I have been advised that there is no basis on which the matter can properly be referred to the police or prosecuting authorities, whatever offence it may have caused to some. As the parcels were correctly prepaid and addressed to individual Members, the Post Office was obliged to accept and to try to deliver them. The Serjeant at Arms is ensuring that the security implications of the incident are taken fully into account. In the light of the reaction in all parts of the House, those who wish to organise such campaigns in that way may wish to reflect on whether that kind of lobbying advances their case.

Mr. Alfred Morris: Some hon. Members often think that the Leader of the House's task on Thursday afternoons is a thankless one, but is he aware that his choice of 25 April, ANZAC day, a day so important to all Australians, for the First Reading of the Australia Constitution (Public Record Copy) Bill is widely appreciated? I am grateful to him for accepting the suggestion that I made last Thursday. Is he also aware that the timing of the Bill's remaining stages is also much appreciated?

Sir Geoffrey Howe: I am grateful to the right hon. Gentleman. He may also like to know that I shall be tabling a motion to enable amendments, if any, to he tabled before Second Reading, which will be for the general convenience of the House so that the matter may pass through the House as expeditiously as possible.

Mr. Andrew Rowe (Mid-Kent): Has my right hon. and learned Friend seen early-day motion 692 which has attracted more than 100 signatures?
[That this House urges British Rail to give full and thorough consideration to proposals for a Channel Tunnel Rail Link based on a junction at Stratford, and to enter into professional discussions with those proposing the Stratford alternative before presenting their Private Bill to Parliament for a decision.]
Will he give time for a debate on the provision of a channel tunnel rail link which is clearly a matter of concern to the nation, and the shambles that has been made so far by British Rail and its private enterprise partners which is a source of considerable concern to hon. Members?

Sir Geoffrey Howe: British Rail and its partner Eurorail will need to satisfy themselves and eventually Parliament that they have chosen the right route for the channel tunnel rail link. They have already looked at the Stratford option. As far as I am aware, they are willing to meet the promoter's alternative schemes.

Mr. Nigel Spearing: In view of the importance of the summit meeting of the European Council in Dublin this weekend, can the Leader of the House assure us that in next week's business there will be a statement on the outcome of that important meeting?

Sir Geoffrey Howe: The summit this weekend is to some extent an extra fixture in the European list. As it is slightly different in character from the ordinary regularly planned summit it may not qualify for the same treatment, but I shall certainly give serious consideration to the hon. Gentleman's point.

Mr. Jonathan Aitken: Will my right hon. and learned Friend quickly recover from that unacceptable reply? It is true that the new summit is informal in its technical nomenclature, but it is probably the most historic and constitutionally important one ever to take place, as we now have the Franco-German proposals for completely changing the nature of Europe and for having a political union with a fast timetable to it—a manoeuvre which would devalue, if not destroy, the role of national Parliaments. Surely my right hon. and learned Friend is not serious in saying that the Prime Minister will not come to the House afterwards to make a statement. It would be shameful if that did not take place.

Sir Geoffrey Howe: If my hon. Friend could lay aside his emotional epithets, he would realise that in the opening of his question he identified both factors that will have to be taken into account. It is a meeting at summit level, at which some important matters may be discussed. On the other hand, it is an informal meeting. Those two points will have to be balanced before I leap to my feet to give an affirmative answer, even to the beguiling questions that have just been put to me.

Mr. Win Griffiths: Will the Leader of the House arrange for a statement to be made on the funding of the Health Service in Wales, because, without exception, every health authority is running into bad debt and my authority of Mid Glamorgan has had to remove from its 10-year capital programme the second phase of the Princess of Wales hospital in Bridgend? At one time, my hon. Friend the Member for Ogmore (Mr. Powell) secured from the Welsh Office a promise that the second phase of the hospital would be built when the first phase was completed in the mid-1980s. We have now arrived at 1990 and, rather than being completed, the second phase has been left out of the programme altogether. This is nothing less than a betrayal of the people of Bridgend, and I hope that a Welsh Minister will make a statement.

Sir Geoffrey Howe: A statement of that length in business questions is in itself something of an achievement. The hon. Member will be able to return to the matter, fortunately for him, at Welsh questions on Monday of next week.

Mr. Richard Alexander: The House will be grateful to my right hon. and learned Friend for his hard and imaginative work on new clause 4 to the Human Fertilisation and Embryology Bill, which no doubt gave the House and the country the broad view of parliamentarians. I invite my right hon. and learned Friend to exercise his talents in that direction yet once more. He will be aware that 5 million people shop regularly on a Sunday. Would it be possible to mount a


similar exercise, whereby various options could be considered—[HON. MEMBERS:"No"]—and voted upon, taking the matter out of party politics before the next general election?

Sir Geoffrey Howe: It is apparent from the reactions to my hon. Friend's question that there is room for more than one view about this matter. He will recollect that my right hon. Friend the Patronage Secretary, in an earlier existence, addressed himself to this matter. I shall take counsel of him, in the light of his experience, before giving an affirmative answer.

Mr. David Winnick: May we have a statement early next week on the ruling by the Council of Europe Ministers on the case involving my hon. Friend the Member for Peckham (Ms. Harman) and Ms. Patricia Hewitt? Is not it essential that, in any such statement we should be told whether the MI5 officers who were responsible for carrying out the targeting of those two—without any justification, as the Council of Europe has ruled—will be disciplined, if they have not been, or dismissed? Should not MI5 be subject to parliamentary scrutiny, as are other such services in other European democracies? It is essential both that we have a statement and that smears such as those made against these two people should end.

Sir Geoffrey Howe: The hon. Gentleman is, in a sense, ahead of time, because the Committee of Ministers in the Council of Europe has yet to adopt its final resolution in these cases, so I am not able to say anything about them. He should also know—he as well as anyone—that, in accordance with the policies of successive Governments, I should not comment on allegations affecting the security services. Thirdly, he should know that since those events are said to have taken place, the Security Services Act 1989 has been passed and under it, such complaints can be considered by an independent tribunal.

Mr. Richard Tracey: Will my right hon. and learned Friend consider an investigation by the appropriate Secretary of State into the administration of community charge rebates by local authorities? May we have a statement on this next week, because there are disturbing reports that some London Labour authorities are sending out community charge bills without any allowance for rebate in cases where people know that they should be granted such rebates?

Sir Geoffrey Howe: That is a serious matter which I shall certainly bring to the attention of my right hon. Friend the Secretary of State for the Environment.

Rev. Martin Smyth: I welcome the announcement made after the business statement that there will be a possibility of amendments to the Australian Constitution (Public Record Copy) Bill because if it were passed, it would be all to the good and we welcome that.
May I press the Lord President to say whether he is able to report on improvements to the amplification system in the House? It has been difficult enough at times for hon. Members to get answers from Ministers and to get them to make statements. It is even more difficult when they are here and we cannot hear them.

Sir Geoffrey Howe: I gave a long written answer on that matter which appeared in Hansard on Monday. One of the features of that answer which the hon. Member may not have noticed is that the sound and acoustics system in the House is many years old and is being re-examined as a whole for its suitability, quite unconnected with the introduction of television.

Mr. Bob Dunn: As a matter of future business, could the Leader of the House consider requiring Mr. Peter Mandelson to present himself at the Bar of the House to give an explanation of why he prevented members of the shadow Cabinet from announcing their policy and the costs of it? Does my right hon. and learned Friend care to speculate on why Mr. Mandelson is so successful in muddling the Labour party?

Sir Geoffrey Howe: That is a matter more for members of the Opposition than for myself, but it is certainly worth giving some consideration to the interesting idea put forward by my hon. Friend that that might be a way in which we can discover something more about Opposition policies.

Mr. Robert N. Wareing: Has the Leader of the House noticed that his right hon. Friend the Prime Minister has addressed the House in a major debate on far fewer occasions than any of her recent predecessors? In view of the disastrous balance of payments and the fact that inflation is rising—it is not just a blip—is not it time that she had the guts to come to the Dispatch Box and lead a real debate, or is she afraid of real opposition?

Sir Geoffrey Howe: The hon. Gentleman may have noticed that my right hon. Friend the Prime Minister comes to the Dispatch Box regularly twice a week and deals with the widest possible range of questions most effectively. He may also recall that when she came to the Dispatch Box for the first debate on the Queen's Speech she dealt very effectively with the ineffective Opposition that confronted her.

Mr. Julian Brazier: Could my right hon. and learned Friend pledge that we shall have a Government statement at such time as certain gentlemen come down from the roof tax and obey the existing law?

Sir Geoffrey Howe: I suspect that it may be for those who have devised the roof tax to produce the answer to that.

Mr. Eric S. Heller: Will the Leader of the House once again reconsider the reply that he gave to my hon. Friend the Member for Copeland (Dr. Cunningham) about a debate on the Iraqi guns, first, because the right hon. and learned Gentleman is an old friend of mine from Merseyside and, therefore, he should be prepared to take into consideration what some of his old friends think about the matter and, secondly, because it is clear that we should have a debate as Mr. Speaker quite rightly allowed a debate on capping a number of local authorities because it was not yet sub judice, but the Secretary of State for Trade and Industry has been hiding behind the sub judice rule, although, as yet, there is no court case relating to that Iraqi issue? Is not it important that we should have a debate on the matter, first, in the interests of Members—Back Benchers as well as Front


Benchers—and, secondly, because, as the Prime Minister said, we should get all the facts, and to get the facts we have to have a debate as quickly as possible?

Sir Geoffrey Howe: I am grateful to the hon. Gentleman for the way in which he introduced his question. I respond to him on the basis that I have given the matter serious consideration. He is right to draw attention to the way in which certain civil cases do not necessarily inhibit discussion in the House. The sub judice rule begins to apply to a civil case only when the case has been set down for trial, but in this case, criminal charges have now been laid against an individual and that has a different effect. In addition, there are continuing investigations by Customs and Excise whose function is to find out the facts in that context. In those circumstances, it would be inappropriate to give any further information on that set of facts.

Mr. Gerald Bowden: A few moments ago, my right hon. and learned Friend's attention was drawn to early-day motion 692. Did he notice that it was signed by more than 100 hon. Members on both sides of the House representing all parts of the United Kingdom? It urges British Rail to consider the alternatives to a King's Cross route to the channel tunnel terminal. Will he provide an early opportunity to discuss the matter, as there is a growing impression that the only sector of the community that will benefit from the King's Cross terminal and the King's Cross route will be the landlords and tenants of the King's Cross development?

Sir Geoffrey Howe: I understand the importance of that early-day motion to which my hon. Friend is the leading signatory. As I said earlier, the point remains that it will be for British Rail to satisfy the House in due course of the method that it chooses. It is certainly open to receive representations such as those made by my hon. Friend in support of alternative routes.

Several Hon. Members: rose——

Mr. Speaker: Order. I draw the attention of the House to the fact that we have another statement and a Report stage, so it will be a pretty late day. I ask hon. Members to put succinct questions please and not to ask questions that have been asked before.

Mr. Matthew Taylor: Will the Leader of the House consider providing Government time for a debate on the problems arising in education, involving the implementation of the Education Reform Act 1988? Whatever the merits of that Act, teachers are experiencing considerable difficulty with the implementation of the national curriculum and schools are experiencing considerable difficulties with the introduction of local management of schools. Will he find time for such a debate?

Sir Geoffrey Howe: I am not sure that I can find time for a debate on those topics, but the hon. Gentleman can be assured that my right hon. Friend the Secretary of State is aware of the importance of the points he raised and is taking great care to ensure that the national curriculum, for example, is introduced in a way that does not overburden the teaching profession.

Mr. James Pawsey: My right hon. and learned Friend will be well aware of the excellent

work that is carried out by the ombudsman and the Select Committee which supervises his work. Will he therefore arrange that a debate on that work should take place on the Floor of the House as soon as possible?

Sir Geoffrey Howe: My hon. Friend and others concerned with the Select Committee have raised that point more than once. The pattern has been for topics handled by the Select Committee and the Parliamentary Commissioner for Administration to arise if they are sufficiently important, but I cannot offer a general right of debate on the ordinary work of that important Committee.

Mr. Dennis Skinner: Will there be a July statement? How is that for being succinct?

Sir Geoffrey Howe: I dare say that the hon. Gentleman's memory will go back far enough to recall the dismal days of the last Labour Government when we were confronted with economic statements about once every six weeks. We are not such a Government and we will continue to conduct ourselves in the proper way.

Mr. Andrew MacKay: Will my right hon. and learned Friend find an opportunity for Members on both sides of the House to express their grave concern that the Kray brothers, one of whom is incarcerated in Broadmoor hospital in my constituency, will be major beneficiaries of a film about their former careers? Would that opportunity allow Members of Parliament to suggest that there might be legislation to ensure that criminals cannot benefit from their crimes and allow Members on both sides of the House to encourage their constituents to boycott the film, bankrupt the film makers and discourage future film makers from making such hideous mistakes?

Sir Geoffrey Howe: My hon. Friend puts forward a comprehensive plan of action to deal with the matter at this stage. I shall bring his concern to the attention of my right hon. and learned Friend the Home Secretary.

Mrs. Alice Mahon: Will the Leader of the House find time for a debate on the farming of wild animals? Is he aware that there are few regulations on the farming of mink and Arctic fox, which are often kept in barbaric conditions and show signs of much distress as a result? Is not it time that the Government stopped bowing their knee to the Fur Breeders Association and started being concerned for animals?

Sir Geoffrey Howe: The hon. Lady can be assured that there is no question of the Government bowing their knee to any vested interest in this or any other context. We take much care and concern about the welfare of animals, but I shall bring her point to the attention of my right hon. Friend.

Mr. David Martin: Does my right hon. and learned Friend share my hope that in next weeks's debate on dog registration hon. Members will understand that such a scheme would amount to a tax on dog-loving and dog-owning pensioners? Although it may be appropriate for the Opposition to introduce a new tax, it would be crazy for us to do so at this time.

Sir Geoffrey Howe: I am ready to endorse the importance of the point made by my hon. Friend. Hon. Members should reflect on the difficulties of collecting vehicle excise duty, which is a much more openly


identifiable tax to be paid or not paid. They would pale into insignificance compared with the difficulties that might arise from collecting dog excise duty.

Mr. Tony Banks: May I congratulate the Leader of the House on his tonsorial turn-out this afternoon? I take it that he is polishing his image for his party's impending leadership contest. May I remind him that in the mid-1980s, when he was doing less exciting things, control of London Regional Transport was taken away from the democratic accountability of the GLC? At that time, we were given an undertaking that there would be an annual debate on its levy, but because of the change in accounting that promise is not being kept. Will the Leader of the House give urgent consideration to a debate on London Regional Transport next week and guarantee that we will have an annual debate on transport in London, given its appalling state under the control of LRT?

Sir Geoffrey Howe: I do not share the hon. Gentleman's judgment on the present condition of transport in the capital. I cannot give the assurance that he requests.

Mr. Nicholas Bennett: Does my right hon. and learned Friend think that, if we devoted the first four days of next week's business to Opposition supply days on the community charge, we might by Thursday when the voters go to the polls, be any closer to discovering what their policies are?

Sir Geoffrey Howe: I am sure that we would be no closer, but I hope that between now and next Thursday my hon. Friend will devote himself to getting that point across to all those who should know about it.

Mr. Alex Salmond: Will the Leader of the House allow time for an early statement from the Secretary of State for Defence on the low-flying Operation Elder Forest, which is taking place this week during the Scottish examination period? Is he aware that this morning at Mintlaw academy in my constituency there were three incidents of low flying when almost 200 pupils were sitting their standard grade English examination? Have not Scottish schoolchildren the right to peace and quiet during this vital examination period and not to be buzzed by low-flying aircraft?

Sir Geoffrey Howe: I take note of the point and will certainly pass it on to my right hon. Friend. It is important to maintain a sense of proportion and to recognise that Scottish schoolchildren benefit from the continued availability of effective defence.

Mr. Michael Jack: Will my right hon. and learned Friend find time for a debate on the production of the Official Report so that hon. Members can place on record their appreciation of the accuracy of its reporting of last night's debate on the community charge? The record clearly shows that the Labour party was unable to give any details of its alternative.
May we expect a statement next week on the radar for the European fighter aircraft?

Sir Geoffrey Howe: I cannot at this stage answer my hon. Friend's second question, but I appreciate what he said in his first question.

Mr. John McFall: I draw the right hon. and learned Gentleman's attention to early-day motion 893.
[That this House notes that to date the Ministry of Defence has carried out no health control studies on refit workers similar to that carried out at Sellafield by Professor Gardner; is mindful that radiation dose exposures of United States nuclear propulsion programme workers are much less than for United Kingdom refit workers undertaking similar tasks; expresses dismay that no radiation dose figures prior to 1979 have been released; and urges the Government to carry out health control studies forthwith as well as urgently reviewing and revising downwards the annual and lifetime dose radiation exposure figures for United Kingdom workers]
I draw his attention also to the revealing answers to parliamentary questions last week on radiation exposure of workers. The Government's approach since the Gardner study has been impotent; one can conclude only that they do not care for workers exposed to radiation. Will the right hon. and learned Gentleman ensure that there is a debate so that the Government will consider the figures and revise them downwards in terms of annual dosage and lifetime dosages of radiation?

Sir Geoffrey Howe: I cannot possibly answer the particular points raised by the hon. Gentleman. He can be assured that the Government and my right hon. Friends take seriously the implications of radiation in any form and I shall bring his points to their attention.

Mr. Phillip Oppenheim: Did my right hon. and learned Friend get a chance to look in at yesterday's debate on local government finance? Did he note the performance of the Opposition environment spokeman who sat in his seat like a shrinking violet and refused to outline the Opposition's alternative to the poll tax? Will my right hon. and learned Friend have as many more debates on the community charge as possible until the Opposition have the guts to tell the country their policies?

Sir Geoffrey Howe: I listened to the speech by the Opposition official spokesman and I noted that he was wholly uncommunicative on that important matter.

Mr. John Home Robertson: Given the increasingly fundamental and detailed questions that are arising about the hated poll tax in Scotland after one full year's experience of it and given the michievous points being made about the alternatives by the hon. Members for Kingswood (Mr. Hayward) and for Glasgow, Govan (Mr. Sillars) and others who want to support the Tory party, will the Leader of the House concede that the best forum for studying the experience of the poll tax in Scotland would be a Select Committee on Scottish Affairs? When may we have a Select Committee which would have the resources and the power to analyse the poll tax and its alternatives?

Sir Geoffrey Howe: Given the sensitivity of Scottish Opposition Members about the extent to which their intolerable tax proposals are already being unduly exposed, I hardly feel that it is necessary to introduce an additional forum for that purpose.

Mr. Roger King: Will my right hon. and learned Friend reflect on yesterday's debate,


especially the Opposition's motion on local government finance? Will he, through the usual channels, persuade Opposition Members that the next time they present a motion to Parliament they should not use such vague terminology, so that the House will have the opportunity genuinely to hear their alternatives to this measure?

Sir Geoffrey Howe: I fancy that my hon. Friend has invited me to undertake a labour of Herculean proportions, but I would rather not do so.

Mr. James Paice: Does my right hon. and learned Friend think that it is appropriate to have a debate next week so that we can examine the dearth of Opposition policies, especially the reason why they now have to set up a 170-man council—presumably, a man and woman council—to design some policies? Does my right hon. and learned Friend recall that a camel was a horse designed by a committee? What would 170 people produce?

Sir Geoffrey Howe: I tremble to think.

Mr. David Nicholson: Is my right hon. and learned Friend aware that the tourist and rural assets of my constituency are such that in recent days they have attracted the presence of no fewer than three Labour Members of the Militant "Don't Pay" tendency, the hon. Members for Tottenham (Mr. Grant), for Coventry, South-East (Mr. Nellist) and, I believe, for Liverpool, Broadgreen (Mr. Fields)? Some of my hon. Friends would give their eye teeth to have the attention of even one of those hon. Members. When can we have a debate on the strength of the Militant "Don't Pay" tendency in the Labour party and the supine weakness of the Leader of the Opposition in dealing with it?

Sir Geoffrey Howe: My hon. Friend has effectively drawn attention to the need for such a debate.

Mr. Harry Greenway: I support the call by my hon. Friend the Member for Berkshire, East (Mr. MacKay) for a debate on the appalling decision of film makers to glorify the hideous violence and murder by the Kray brothers in east London. They are being rewarded, because their actions have been glamorised into a so-called artistic performance. Is not it important for the House to consider the so-called artistic aspects and the misuse of money going to people who, to say the least, do not deserve it?

Sir Geoffrey Howe: I can understand my hon. Friend's concern, and my right hon. and learned Friend the Home Secretary has been in the House to hear the points that he has made.

Mr. Tony Favell: May I join in the call to my right hon. and learned Friend for another debate next week on local government expenditure legislation? It is clear from yesterday's debate that, although Labour members may be trying to loosen trade union ties, they remain as tightly bound as ever to the town hall barons of Liverpool, Manchester, Lambeth and Sheffield and simply dare not say what their policy is, for fear of annoying them.

Sir Geoffrey Howe: I am grateful to my hon. Friend for making the point so clearly.

Strangeways Prison

The Secretary of State for the Home Department (Mr. David Waddington): With permission, Mr. Speaker, I should like to make a further statement to the House about the serious disturbance at Manchester prison.
As the House will be aware, at about 6.20 pm yesterday, prison staff regained control of the prison. One of the six inmates who remained in the prison was taken back into custody earlier in the day, and the remaining five surrendered later. All prisoners in Strangeways on 1 April have been accounted for, and certainly nothing has been found to substantiate the wild stories that appeared in the press in the early stages of the incident. That yesterday's operation to recover the prison was concluded without further injury to staff or prisoners, in very difficult and dangerous circumstances, is a great tribute to the skill and discipline of the prison officers.
The House will, I am sure, wish to pay tribute to the considerable courage and professionalism displayed by the officers who did the job yesterday and all those in the prison service involved in bringing this incident, and the recent disturbances in other prisons, to a successful conclusion. In particular, I wish to express our gratitude to the governor of Manchester prison, Mr. Brendan O'Friel and his colleagues, who have worked tirelessly to bring the disturbance there to an end with minimal danger to life. I also wish to thank the police, fire and ambulance services for their invaluable and unstinting help here and elsewhere. Among the many whom I was able to thank at Strangeways last night was a representative of the board of visitors who had been there all day; indeed, someone from the board of visitors was present throughout the disturbance. I thank them all most warmly.
Events at Dartmoor, Bristol and Pucklechurch show that the prison service is not loth to bring to a swift end disturbances of this sort. But circumstances obviously vary a great deal and different tactics have to be adopted in different situations. Our strategy throughout each of these incidents has been to regain complete control at the earliest moment consistent with incurring as few casualties as possible among both prison staff and prisoners. I believe that that was the right strategy here and that events have vindicated it.
I greatly regret the sad loss of a prison officer who died after serving loyally during the disturbance, and also the loss of life of one of the remand prisoners. I wish to offer, once again, my deepest sympathy to the families concerned.
The Greater Manchester police have already embarked upon a major criminal investigation and I want to make it absolutely plain that those who commit criminal offences in this sort of incident must expect to face the full rigours of the law. There are already a number of very serious criminal offences, such as riot, violent disorder and affray—let alone murder and grievous bodily harm—which are available in the sort of circumstances that we have seen at Manchester. But I want to make absolutely sure that the courts have all the powers necessary and I am reconsidering the possibility of creating a new criminal offence of prison mutiny.
The House would not expect me to say that all we need do now is wait for the outcome of Lord Justice Woolfs inquiry. Much has been done already, but there are other


things that we must do urgently. The incident has led directly to the loss of more than 1,500 prison places at Manchester, at a time when we were making significant inroads into solving the problem of prison overcrowding, and will inevitably lead to difficulties in other prison establishments until the places are regained. We are taking urgent steps to make available as many secure places as are needed.
I have already made it clear that we are bringing forward the recruitment of 200 more prison officers to help establishments that are under particular pressure caused by these appalling incidents. We shall consider urgently whether there is any need for additional training of staff to deal with incidents of this sort. More than 3,000 officers have been specially trained in the past 12 months, and more are being trained. We have already placed orders for an extra £750,000 worth of equipment and clothing for the personal protection of officers.
New prisons are designed so as to minimise the risk of events developing as they did in Manchester, but we need to consider what physical improvements can quickly be made to existing establishments. Officials are conducting an urgent review of structural and other means of preventing prisoners getting on to roofs in old Victorian prisons. We will also examine how to make it easier for prison staff to get on to roof areas and the higher landings. Officials will also examine methods of locking doors and the issue and carrying of keys, the storage of flammable items in kitchens and how we can improve protection to kitchens, pharmacies and medical treatment rooms. There is then the physical protection of vulnerable prisoners. We must study whether that can be strengthened.
We must also recognise that large numbers of prisoners in the same place at the same time can give rise to considerable risk. There is a difficult balance to be struck between restricting the numbers allowed to congregate, which can itself lead to trouble, and creating a constructive regime, which can make a contribution to the maintenance of control in prisons, but I am certain that that is something we must look at.
The results of this work will be reported to me during the coming weeks and none of it pre-empts the outcome of Lord Justice Woolf's inquiry. The House will accept that vigorous action is now necessary to try to prevent further disturbances.

Mr. Roy Hattersley: The conclusion of the riot and occupation of Strangeways prison will come as a relief to the nation. It was an embarrassing as well as a depressing episode from which we all have much to learn. The House will wish to express its admiration of and gratitude for the way in which the governor, prison officers and police, fire brigades and other public services carried out their difficult tasks. To that we add our condolences to the relatives of Mr. Derek White and Mr. Walter Scott and our sympathy to those members of the public services who were injured.
It would be wrong, I believe, to come to any firm conclusions about the causes or consequences of the Strangeways riot before Lord Justice Woolf reports. However, may I begin by telling the Home Secretary that I remain a supporter of a policy designed to minimise the risk of death and injury to prison officers, to the fire services and to the inmates? I also believe that it was right

for the prison officers and authorities on the spot to take their own decisions without instructions from Whitehall. May I therefore ask the Home Secretary to confirm or deny the frequently repeated allegation that in the early days of the riot the governor wished to pursue a different and more aggressive policy but was refused permission to do so?
No one who witnessed the siege on television will doubt that some of the men were not susceptible to rational treatment and are certainly not likely to be impressed by changes in the titles of the offences that they may have committed. Of course we condemn their behaviour as we condemn the behaviour of other rioters and they must face the full rigours of the law. However, clearly some were caught up in the early days of the riot because of the despair that they felt at the conditions in the prison: three men in one cell; only 11 hours a week outside those cells, slopping out, one shower and one change of clothes a week if they were lucky. May I therefore ask the Home Secretary to take immediate steps to reduce the present population—steps that are even now within his power——

Mr. Robert Key: They are happening.

Mr. Hattersley: —possible improvements about which the Home Secretary made no mention this morning and which I presume the hon. Member for Salisbury (Mr. Key) never heard.
Will the Home Secretary reduce the number of remand prisoners by applying the 110-day trial deadline throughout England and Wales immediately and by ending the 28-day custodial demand, which was introduced in the Criminal Justice Act four years ago? Will he consult the Lord Chancellor on immediate steps to improve the efficiency of the courts so as to ensure that trials that begin swiftly can also be completed in a minimum time? Will he speed up the introduction of non-custodial sentences described in his own White Paper, if necessary by introducing legislation in this Session of Parliament?
In the light of that, may I ask him specifically about management in the prison service? We are constantly told of the additional prison officers whom the Government have recruited. Will the Home Secretary confirm that that recruitment has been accompanied by such reductions in overtime that the likelihood on any one day is that fewer prison officers will be on duty than was the case before the introduction of fresh start? Will he confirm specifically, by answering the question that I asked him three weeks ago and which he did not answer, that there were 30 fewer officers on duty at Strangeways at the time of the riot than there would have been had fresh start not been introduced? In the light of his statement, will he tell us whether the 200 more—his word—prison officers are additional to his existing proposals, or is he simply speaking of the targets that he had announced to the House before the Strangeways riot?
Equally, we are constantly told of the new building programme. However, it is not producing anything like a sufficiently swift reduction in the number of prisoners in unacceptable conditions. Will the right hon. and learned Gentleman accelerate the renovation of our Victorian prisons at least to put an end date to the debasing practice of slopping out?
The Home Secretary said in his statement that 1,500 prison places have been lost at Strangeways during the


past three weeks. How many places have been lost in the whole prison system during the same period? I understand that it is about twice the number that he quoted in the House this afternoon.
On the subject of the action that may be taken before or after Lord Justice Woolf's report, may we be assured that Lord Justice Woolf will examine the effect on the riot of constant television coverage? Many of us believe that, as in the case of the Balcombe street siege, television should have been prevented from encouraging prolonged defiance.
May I ask the Home Secretary a question about the cost of the Manchester operation? Clearly the Strangeways riot was a national crisis. It would be intolerable if the people of Manchester were required to pay an even higher poll tax to meet the bills for police and fire brigade. May we be promised that the Government will provide appropriate financial assistance? I repeat that it is a national crisis that should be financed from national funds.
The Home Secretary will recall—it is undeniable—that previous reports on prison disturbances have met with little or no positive response from Governments. Will he promise that, when Lord Justice Woolf reports his findings, they will be subject to a full debate in the House during which he, the Home Secretary, will give a clear indication of the action that he proposes to take and the time scale that he offers for that action to be put into operation?

Mr. Waddington: I am grateful to the right hon. Gentleman for his expression of admiration for all those who have been involved in this operation. I am also grateful to him for his expressions of sympathy for the relatives of the dead and for the injured. Of course he is right to say that, generally speaking, we must wait for the conclusions of Lord Justice Woolf, but I think that I made it plain in my statement that there are things that we can do now and things that we should do now. Certainly we should not take the view that we should be frozen into inaction because a committee has been set up to look into the matter. That would not be the right approach.
I am grateful to the right hon. Gentleman for expressing support for the policy that was adopted to minimise the risk of death and injury. It has been said that a more aggressive policy was wanted. The media have said that the governor wanted a more aggressive policy at the beginning and was overruled. I should make the position clear straight away. The public should know that governors, when situations such as this arise, are not left without support. They receive support from the region and from the prison department.
I wish also to make it abundantly plain that, when I talk about support from the prison department, I am not talking about people who are ignorant of the management of prisons putting their spoke in the wheel. The deputy director general of prisons, who has been criticised by some in the media today, is himself a former prison governor.
On occasions such as this a great deal of advice is taken and a conclusion reached. Ministers accepted advice from those responsible for the operations—for example, from the deputy director general of the prison service, as I say, himself a former governor—after consultation with the governor.
I am not for a moment saying that if there had been the offence of mutiny, that would have made any difference in these circumstances. But we must not—I am sure that the right hon. Gentleman would not—assume that if there is more trouble, it will follow exactly the same pattern as the trouble in Strangeways. I am suggesting for discussion that whereas, for instance, in the case of riot, 12 must be involved and there must be action such as would put a reasonable person in fear of injury, the ingredients of the old offence of mutiny, which was an offence under prison regulations, were that two or more people were acting in combination to overthrow or resist the lawful authority of the governor or his staff. So it might be thought that in certain circumstances that would fill a gap not filled by other offences on the statute book.
As I said in my first statement, it is wrong to suggest that no action has been taken recently to deal with having three prisoners to a cell. Indeed, rapid progress has been made in Manchester. I believe that before the riot broke out there were only 133 examples of three prisoners to a cell. That was a great improvement on 459 the year before. The matter is put in perspective when one compares that with the total population in Strangeways of 1,649.
The right hon. Member for Sparkbrook calls on us to reduce the prison population. I am happy to say that I have been lucky since arriving at the Home Office to have witnessed a rapid fall in the prison population. There has been a fall of over 2,000 in the past year. Indeed, had there not been that fall in the prison population, it would have been much more difficult to have accommodated those who must now be placed in other accommodation because of what happened at Strangeways.
The right hon. Gentleman says, and persists in saying, that we should, as it were, begin to take action to do something about punishment in the community. I pointed out then that one of the reasons why there has been a fall in the prison population is that the courts are already sending fewer people—especially young people—to prison. It is not a case of our producing a White Paper that marks a fresh start; it is a case of our producing a White Paper that builds on all the achievements of the past few years, and on the changes to legislation made in the Criminal Justice Acts 1982 and 1988.
I can give the right hon. Gentleman good cheer on tirne limits. I think I am right in saying—my right hon. and learned Friend the Solicitor-General, who is sitting next to me, may confirm it—that they should be in force throughout the country by the end of the year. They are already in force in a substantial part of the country. and, incidentally, were in force at the time of the outbreak of the Manchester disturbances.
I have been asked about a reduction in overtime. I must make it plain to the right hon. Member for Sparkbrook and others that fresh start was a negotiated package agreed with the unions and supported by prison staff. There was a ballot, in which more than 90 per cent. of those who participated voted in favour of fresh start.
Fresh start was introduced because of excessive dependence on overtime. It was agreed that there would be a measured reduction, and that half the hours lost would be made up through the recruitment of new staff. As I have said before, it was not a case of there being no additional recruitment of staff, there are now more than 3,000 more prison staff than there were three years ago, and more than 1,100 more are being recruited this year. The 200 were already in our programme for this year. I do not know why


the right hon. Member for Sparkbrook is grinning. I have already said that we are talking not about 1,100 staff for this year, but about an additional 1,100. The 200 to whom I referred have been recruited and brought forward for training earlier, so that they will be in service by about September rather than later in the year.
The present position must be seen in perspective. Over the past 10 years, there has been an increase of no less than 46 per cent. in the number of prison staff; during the same period, there has been an 11 per cent. increase in prisoners. I agree with the right hon. Gentleman that we must make swift progress towards ending the practice of slopping out, and in Manchester progress had been made towards that end. The right hon. Gentleman will remember that we announced at the time of the autumn statement last year that we were able to divert resources from new prison building towards refurbishing existing prisons, because our policies were bearing fruit and the prison population was falling.
I agree largely with what the right hon. Gentleman said about the constant television coverage, which has not been helpful. It was not just a question of excessive coverage; at times the coverage was irresponsible. I clearly remember sitting in front of the television and hearing, as the first item on Independent Television News, that there were three confirmed deaths. That was after the Home Office had been consulted and had said that it was not possible to confirm any deaths. That was a most disgraceful event. I hope that it will never happen again.
Appalling costs will be incurred. There is no point in any of us shrinking from that fact. There is no point, either, in trying to avoid the fact that considerable costs have been incurred as a result of policing the incident.
The right hon. Member for Sparkbrook knows perfectly well that the general rule that is applied by the Home Office is that from time to time all police forces have to deal with exceptional circumstances. Some have to deal with party conferences; some have to deal with royal residences; some have to deal with terrorist incidents. The general rule is that police forces have to take that on board. However, I have agreed to set up a meeting with the people from Manchester at which all these matters will be discussed.
When Lord Justice Woolf reports, there will have to be a debate, and I hope that the business managers will quickly find time for a debate so that these matters can be taken further.

Several Hon. Members: rose——

Mr. Speaker: Order. In relation to what the Home Secretary has just said, may I ask for single questions, please? This is an important statement which covers other constituencies, apart from Manchester. We have a heavy day ahead of us and we must move on to the next business by 5.15 at the very latest.

Sir Fergus Montgomery: If it was safe to take action yesterday, why could nothing be done a week ago when the circumstances were more or less the same? Can my right hon. and learned Friend give a categorical assurance that top priority will be given to getting rid of three men being kept in a cell for 20 hours a day and sloping out, which is obviously a breeding ground for trouble?

Mr. Waddington: I have already answered my hon. Friend's question about slopping out. I agree entirely with him that it ought to be given priority. I am also glad that my hon. Friend put his question in the way that he did. It highlights the fact that some people said that the prison officers should have gone in after 24 hours, that some people said that they should have gone in after 48 hours, and that others said that they ought to have gone in a week ago. The chairman of the Prison Officers Association complained to me this morning that we did not take action after 24 hours, but yesterday he said that the lives of prison officers were being placed at risk in order to bring the incident to an end: so as many people as there are, as many opinions there are.
The sensible approach is to obtain good advice. Unless there are good reasons for rejecting it, that advice should be taken. It is so easy to be wise after the event. However, the commonly held view for very many days—even weeks—and the view held also by the national media was that the incident would not last long and that it was not worth risking lives.
When these Ramboesque people talk about bringing in the Army and the SAS and sending in thousands of prison officers, they always forget that, after the first 24 hours, nobody in Strangeways was at risk either of losing his life or of injury, except in the sense that the prisoners were at risk and might have suffered accidents. The time was not wasted. Careful planning over a considerable period resulted in yesterday's events. With the prisoners on the roof, the most difficult problem to overcome was how to get large numbers of prison officers up to that level. Eventually, a new way into the roof space was found.
It is nonsense to talk about the use of tear gas. One has to ask whether there would have been any grounds for police intervention. I am sure that the right hon. Member for Morley and Leeds, South (Mr. Rees) would agree with me that one would not commit the police unless there was a serious risk to life or a hostage situation. The Army could not go in unless it was asked to do so by the chief officer of police if he felt that the demands made on him could not be carried out by him alone.

Mr. Merlyn Rees: It is, of course, right to await the Woolf report, but does the Home Secretary agree with me that it is right to leave ultimate operational control to the governor? Nevertheless, did the Home Secretary, or his Department, at any time during the later stages of the masquerade on the roof by a few people offer to send in the SAS to deal with the incident?

Mr. Waddington: I am almost sure that I am right when I say that it would be for the chief constable to judge whether the risk to life was such that, because he could not take the action required, it was necessary to seek military assistance. That point did not arise because at no stage did the police take the view that they could not master the incident themselves. That stage was not reached because the matter was in the hands of the prison officers. As events worked out, how right it was that the prison officers regained control of the prison. What sort of criticism would be coming from the media now if the Army had been sent in and 10 people had been killed? What sort of copycat riots would there have been if five of the prisoners on the roof had been killed?

Sir John Wheeler: Does my right hon. and learned Friend agree that, however serious the


incident was and however long it took to bring it to an end, the fact is that it began with a prison population of 1,500, that it resulted, when the disturbance occurred, in 100 being in rebellion, that the prison governor brought the incident to a conclusion with his staff without involving outside forces of any kind, that no prisoner escaped, that no prison officer was killed or injured at the conclusion of the event and that throughout the incident the governor, ably supported by ex-senior governors in the prison management, had control of the prison?

Mr. Waddington: That is absolutely right. However, may I correct my hon. Friend in one small regard? Those who talked about storming the prison after the first 24 hours ought to be reminded that 133 prisoners were still on the loose then. When I went to Strangeways last Sunday, I discovered that there have always been some prisoners in Strangeways; at no time have there been no prisoners in captivity in Strangeways. There were no escapes. Again I compliment all those involved in the operation on the work that they did. In the first 24 hours, they managed to move 1,500 people out of the prison. They probably saved the lives of some of the rule 43 prisoners. Altogether, they carried out a magnificent exercise. Their skill and the common-sense way in which the operation was carried out can be judged by the supreme criterion that no one was injured or killed—apart, unfortunately, from the deaths right at the beginning of the trouble.

Mr. Robert Litherland: Does not the Home Secretary accept that his comments to the media about the dangers of bringing in the Army and the SAS will be seen merely as a red herring? Is he aware that the prison officers at Strangeways presented a plan to be executed by the prison officers with the minimum force? If he is not aware of that fact, I suggest that there was a marked lack of liaison between the prison department and the Home Office.
Does not the Home Secretary feel a sense of shame about his own appalling complacency? It was 22 days before he visited the biggest prison fiasco in history, during which this so-called Government of law and order were held up to world ridicule. The only point on which I join the Home Secretary is to say that the governor is first class and has a magnificent staff. We are watching carefully to ensure that he is not made a scapegoat.

Mr. Waddington: The hon. Gentleman has a cheek. I read his article in the Sunday Express last Sunday—

Mr. Litherland: Many days ago.

Mr. Waddington: —in which he supported the action taken by our staff.

Mr. Michael Shersby: Is my right hon. and learned Friend aware that the Greater Manchester police will be grateful for his tribute to them today for the way in which they contained the perimeter? How long is the criminal investigation that those police are carrying out likely to last? Can my right hon. and learned Friend assure the House that severe punishment will be meted out to anyone who is found guilty as a result of charges brought against him?

Mr. Waddington: That is, of course, not a matter for me but for the courts, and who is charged is not a matter for me. I spoke to the chief constable of Greater Manchester

last night, and I do not have the slightest doubt that the criminal investigation is being pressed ahead with all speed.

Mr. Robert Maclennan: Will the Home Secretary accept the thankfulness and admiration with which we greet his statement and the attitude that has been shown throughout these appalling events by the police, by the prison officers in particular, and by other public servants? Will he also accept that it would be quite wrong to seek to draw conclusions on the 25 days of mayhem only 24 hours after the events have been concluded?
Will the inquiry under Lord Justice Woolf be sufficiently widely drawn to take into consideration the impact that the events have had on other prisons and on the prison system generally? There was the greatest disquiet that what was happening in Manchester would simply spark off other ugly events, both in other antediluvian prisons and in modern prisons.

Mr. Waddington: I am grateful to the hon. Gentleman for his introductory remarks. I do not have the slightest doubt that Lord Justice Woolf will be able to investigate the matters to which the hon. Gentleman has referred, although the interpretation of his terms of reference is a matter for Lord Justice Woolf himself.

Mr. John Greenway: Does my right hon. and learned Friend ageee that it is easy for the armchair expert to make suggestions at a distance on how the riot could have been brought to an end, but that the events have shown that those on the ground who control the situation are the best judges of what should be done? Can he confirm that the ending of this siege and riot was related to the fact that the prison authorities were able to get above the prisoners and that it was only then that action to move into the gaol could be contemplated?

Mr. Waddington: That is absolutely true. At one stage, a scaffold was put up on the side of the remand wing and an exercise was carried out which involved punching a hole through the gable end at roof height and seeing whether a number of men could be put through there on to the wire inside. The most appalling problems were attendant on that experiment. One had to judge how many men the wire could carry and one had to work out whether one could get the first man through the hole before he was murdered by a person inside holding a scaffold pole. Another way of getting into the roof space had to be found. I gather that an ingenious way was eventually found to get into the roof space through the walls of the chapel.

Mr. Alfred Morris: Is the Home Secretary aware of my many exchanges with his Department, after discussion with the prison's doctor long before this predicted disaster, about the number of people who, being seriously ill mentally, were wrongly accommodated at overcrowded Strangeways? Where are they now? Are they still inappropriately accommodated in overcrowded prisons? What extra manpower has gone to the prisons that are now trying to cope with those who have been evacuated from Strangeways?
May we have a clearer reply to the question of my right hon. Friend the Member for Birmingham, Sparkhrook (Mr. Hattersley) about the potential cost of all this to the people of Manchester?

Mr. Waddington: There are far fewer mentally disordered people in the prison system than there used to be. It is, of course, up to the courts to use the powers they have to deal with people other than by sending them to prison when they are mentally disturbed. That point is met. However, I do not want the right hon. Gentleman to feel that I do not take his point seriously, and it is one of the many points into which we should inquire. We should ensure that there is correct accommodation for those who are mentally disordered and yet still have to be kept in custody.
I cannot yet give the right hon. Gentleman any estimate of the cost of all this, but obviously there will be an opportunity for hon. Members to ask questions here and I shall obtain all the information I can as soon as possible.

Mr. Ivan Lawrence: May I commend my right hon. and learned Friend for his clear indication this afternoon that he will take immediate, positive and constructive action on the lessons that have already been learnt about this deplorable incident? Does he agree that, if the prison officers had gone in too early in the well-defended position that he has described and serious injuries and deaths had resulted, the copycat results would have been nothing short of horrific?

Mr. Waddington: My hon. and learned Friend is so obviously right; I made that point earlier. I have no doubt that, if anybody had been seriously injured or even killed, I should not be standing here today being criticised for not taking tough enough action. I should be standing here accused of having imperilled people's lives without any justification.

Mr. Tony Lloyd: I join the Home Secretary in giving due praise and credit to the governor and his staff at Strangeways. However, I want to ask the right hon. and learned Gentleman about his own role and that of senior management in the prison service. Can he deny that there were requests for specialist equipment or for specialist personnel which were not made available to the governor of Strangeways and which could have resulted in the siege being ended more quickly without any loss of life or serious injury to those involved? I should like the Home Secretary to be very precise in his answer.

Mr. Waddington: I know that new equipment was obtained and that there were allegations that there was not enough equipment. I know that a further order for more equipment was placed to the tune of £750,000, to which I have already referred. I went to Strangeways last night and I saw some of the control and restraint teams. I questioned them on whether they had been properly equipped to carry out their operation. They said that they were properly equipped, although there was a case for smaller shields for working in confined spaces.

Sir Peter Emery: Will my right hon. and learned Friend accept that we are grateful for his extensive statement, which must be closely studied, and that the House must recognise the need of Ministers to support local governors and local control? Will he also accept that there is a strong view among many people that one cannot treat prisoners in mutiny with kid gloves and that the message must be clearly understood that the maximum force will be used as soon as possible to overcome riot and mutiny, even if it carries the risk of physical harm to prisoners? Unless it is understood that people who riot and

mutiny stand physical risk to themselves, there is a great chance of copycat mutinies and riots to attract the media, including television. A strong stance is urged by many.

Mr. Waddington: My hon. Friend will recall that, as I said in my statement, what happened at Pucklechurch, Bristol and Dartmoor makes it plain that the prison department is perfectly prepared to take tough action when tough action is appropriate. Yesterday I heard a prison governor being quoted as saying that the difficulty in these situations is that unless control of the prison is regained in—I think he said—the first few minutes or the first hour or two, almost insuperable difficulties are involved.
As I said earlier, what happened has been frustrating beyond measure for those of us who have had to carry the responsibility, and it has been infuriating for the public. Indeed, some members of the public have found it humiliating and I do not blame them for that. However, the public's attitude would have been very different if substantial loss of life had been entailed, and if the place had been stormed on the first day, I believe that the prison could have been retaken only with the risk of substantial injury and substantial loss of life.

Mr. Derek Fatchett: The Home Secretary and other hon. Members have made it clear that we owe a debt to the prison officers. However, from all that we have heard during the events at Strangeways, it is also clear that the morale of prison officers is low, with a number of criticisms of the prison service. Does the Home Secretary intend to meet the Prison Officers Association to discuss the possibility of renegotiating fresh start and the additional manning implications that follow from what happened at Strangeways? From the right hon. and learned Gentleman's earlier comments, it is clear that the number of jobs that he has promised were already in the pipeline for this financial year and that all that he is promising is to bring those jobs forward.
Is it not clear that in a prison such as Leeds, which is already overcrowded and has the worst conditions of any prison in this country, the Home Secretary is asking the prison staff to face yet more days of intolerable strain and bad working conditions?

Mr. Waddington: I do not detect the low morale of which the hon. Gentleman has spoken. Indeed, the prison officers to whom I spoke last night were proud to have taken part in a successful operation.
It is not true to say that prison officers are poorly paid. The average remuneration of a prison officer is now £16,000 per year, and £18,000 per year in London. The difference today as compared with a few years ago is that then prison officers had to work 56 hours a week to earn their remuneration, whereas they now work little more than an ordinary working week. Therefore, there has been a vast improvement in their position.
Obviously there will be opportunities for fresh start to be discussed and perhaps staffing levels will be thought a matter of importance by Lord Justice Woolf. However, I repeat what I said a short time ago. Fresh start came about as a result of an agreement with the POA and as a result of the general recognition that we could not continue with prison officers having to work absurd overtime hours to receive a decent remuneration.

Mr. John Browne: Does my right hon. and learned Friend accept that curbing the large concentrations of prisoners could have a major effect on prisoners' cell time and on staffing levels? If he adopts such curbs, will he please ensure that they are properly financed?

Mr. Waddington: I put the matter in the way that I did because it needs careful study. On the one hand, if one cuts the size of large assemblies, one reduces the immediate risk, but, on the other hand, the more restrictive the regime, the more pressures there are to build up. We must examine that matter logically and sensibly and come to a conclusion about the best way to proceed. I am sure that no hon. Member would say that that is not something that we should study carefully; after all, this all began because there were 300 such people all together in the chapel.

Dr. John Reid: Although I welcome many of the things that the Home Secretary has said, may I offer one or two observations arising from the experiences at Shotts prison in my constituency which is, as he knows, one of the most modern prisons in Britain? First, good design and a full complement of officers are no guarantee that there will not be trouble. Secondly, that is especially true when the prisoners can watch every night on television a long-running siege at another outdated prison. Thirdly, while minimising the risk of danger to prisoners and/or officers, we should also weigh in the balance the fact that such a long-running siege might encourage activity at other prisons and put officers' lives at risk, as was the case at Shotts. Finally——

Mr. Speaker: That is the fourth point.

Dr. Reid: I said "one or two", Mr. Speaker, but that is a generic Scottish legal term for "four".
Finally, as the effect that a small number of disruptive prisoners can have must now have been brought to the attention of the Home Secretary, will the right hon. and learned Gentleman bring that point to the attention of Ministers at the Scottish Office and ask them to abandon their crazy plans to centralise all Scotland's disruptive prisoners at Shotts prison in my constituency, as that could only lead to further heartache and problems?

Mr. Waddington: I shall certainly draw the hon. Gentleman's remarks to the attention of my right hon. and hon. Friends at the Scottish Office. I am grateful to the hon. Gentleman for his opening remarks, which show the simplistic nature of some of the propositions that have been advanced over the past three or four weeks. Shotts is a new prison which is not overcrowded and where nobody suggests that there are not enough prison staff. We should bear that in mind when we hear all the stories to the effect that none of this would have happened if only fresh start had never come into existence and there is more prison officers. What has happened is a classic example of the way in which trouble can brew up other great trouble for no apparent reason.
On the point about copycat action—I am sorry that I did not reply to the point made about this by my hon. Friend the Member for Honiton (Sir P. Emery), but I had mentioned it earlier—if people had been killed, I believe that there would have been far worse copycat action. The choice that had to be made was between taking a more cautious approach and ensuring that there would not be an unacceptable loss of life, in which case there was time for

copycat action, and going in hard, risking life and probably causing loss of life, in which case there would certainly have been copycat action.

Mr. Richard Alexander: Is not one of the most distasteful features of the whole business the attitude of some of the tabloid press, with some suggesting that 12 prisoners had been killed and that people had been castrated during the riot? Without making this a party political matter, to coin a phrase, is it not pertinent to ask, which side do they cheer for?

Mr. Waddington: It is certainly not a party political matter, but I was disgusted by the headlines in some of the press. The Sun stated:
12 dead in jail drug riot".
Other headlines included that in the Daily Star which stated:
10 die in jail riot horror".
The Daily Express reported:
12 murdered in jail riot";
Today had the headline:
Prison mob hanged cop".
The Daily Telegraph wrote:
Prisoners die as rioters burn jail";
and the Daily Mail referred to
Twelve dead in jail riot",
with The Sun stating:
Bodies cut up and dumped in sewer".
As I have already said, even ITN stated incorrectly and without any justification that three people had been killed.
That will not do. I do not want to incur even more bad publicity than I have had in the national press by being so critical, but the general public would feel that I would be failing in my duty if I did not emphasise how disgraceful such reporting has been. It has not helped a solution to be arrived at in any way.

Mr. Dennis Skinner: Is the Home Secretary aware that the episode lasted nearly as long as the Falklands war? Why should the British taxpayer have to fork out £200 million to finance the shambles just because we have a lousy Home Secretary who cannot handle the job? If anybody should be paying the bill, it should be the Home Secretary and other members of the Government. If a local authority had been in charge, it would have been surcharged.

Mr. Waddington: This was not a war. A war always costs lives. Those who decide to engage in war make up their minds before doing so that there will be what is called acceptable loss of life. It is ridiculous for the hon. Gentleman to draw an analogy between the events at Strangeways and a war. All reasonable people would say that in conducting such an operation one should start with the proposition that no one should be put at unacceptable risk, let alone danger, to his life.

Mr. Tim Devlin: Is my right hon. and learned Friend aware that late last year, before the Strangeways riot, there was a similiar riot at Kirklevingt on prison in my constituency? It seems clear from what has happened during the past two weeks that, whatever public opinion might have been—that has given rise to great pleasure this afternoon—the public would approve of an immediate and, if necessary, violent reaction to this sort of activity in our prisons and the demolition of our Victorian prisons. Therefore, will my right hon. and learned Friend immediately set up a centrally directed riot squad, armed


if necessary, to deal with such events, and will he take advantage of the situation at Strangeways to demolish the prison and build a new one on the rubble?

Mr. Waddington: As I have pointed out, there was a pretty violent reaction at Bristol, Dartmoor and Pucklechurch, so the prison department is clearly not afraid to take violent action. The question is, what is it sensible to do when 135 people are still at loose in the prison and up in the rafters? How many prison officers could one allow to be killed in order to put them through the doors downstairs, making them climb on to gangways which had been rendered unsafe by the removal of bannisters and through an area which we already know had been booby-trapped? I should like to see some of our Victorian prisons demolished, but one must take a common-sense view.
We must accommodate those whom it is proper to send to prison. As I have already pointed out, we have done a great deal to introduce the possibility of more punishment in the community and there has been a reduction in the prison population, but it will be a long while before we can get rid of all our Victorian prisons.
I am glad to be able to tell my hon. Friend that during the past year more than 3,000 prison officers have been specially trained in the control and restraint technique to deal with the sort of situation which has occurred recently in our prisons. It is now proposed to train even more, but it is a good thing that over a year ago that special training programme was embarked upon.

Mr. George Foulkes: What guarantees are there that the Woolf report will not join other riot and disaster reports gathering dust on the shelf while the Government proceed in their own ideological and dogmatic way? Which of the lessons learned from the riots at Saughton and Peterhead in Scotland were applied to the riot at Strangeways?

Mr. Waddington: The lessons of Peterhead were not thought relevant. That is a classic example of how unrealistic it is to talk of bringing in the Army. If someone is a hostage in a prison in imminent danger of death, there may be a case for putting in the Army; there is certainly no

case for putting in the Army when seven scruffy layabouts are holed up in a prison and there is a way of getting them out without the loss of a single life. I can assure the hon. Gentleman that we shall look swiftly at the conclusions reached by Lord Justice Woolf. I thought that we had done rather well with reports recently. We certainly acted quickly when Lord Justice Taylor produced his report.

Mr. James Kilfedder: What is the present estimate of the damage caused to Strangeways prison? Was not most of the damage caused after the first couple of days?

Mr. Waddington: I do not know. We shall have to make an estimate, and when that has been done the House will be told. I do not know how much damage was done in the first two days and how much was done thereafter, but I do know that a lot was done in the first day or two. There is no doubt that a great deal of damage was done then, including the burning of an old chapel. A whole building was destroyed.

Dr. Michael Clark: How would my right hon. and learned Friend advise me to reply to those of my constituents who write saying that the goings on in Strangeways during the past three and a half weeks have brought shame on the governor, derision on the Home Office and ridicule on the country?

Mr. Waddington: I would say that it is easy to see why people became so thoroughly frustrated and why, seeing the scenes on their televisions, they were upset for Britain's reputation. But at the end of the day those responsible have to make rational plans and execute them. I hope that my hon. Friend will make it clear to any constituents who talks nonsense about bringing in the SAS and taking the place by storm that in such a situation a Home Secretary who wilfully imperils the lives of prison officers, let alone the lives of prisoners, would be severely criticised, and rightly so.

Several Hon. Members: rose——

Mr. Speaker: Order. I shall give precedence to the three hon. Members whom I have been unable to call on today's statement the next time that we return to the matter.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 14 MAY

Members successful in the ballot were:

Mr. Bowen Wells
Sir Hugh Rossi
Mr. David Shaw

BILL PRESENTED

TOXIC AND HAZARDOUS SUBSTANCES (MISCELLANEOUS PROVISIONS) (No. 2) BILL

Mr. Ian McCartney, supported by Mr. Mike Watson, Mr. Frank Doran, Mr. Eric Martlew, Mr. Martyn Jones, Mr. Keith Bradley, Mrs. Alice Mahon, Mr. David Hinchliffe, Mr. Thomas McAvoy, Mr. John Battle, Mr. Gerry Steinberg and Mr. Lawrence Cunliffe, presented a Bill to protect the general public in the purchase and application of toxic and hazardous substances within the home environment; to provide for the labelling of such products; to provide for the licensing of manufacturers in respect of hazardous substances, products and processes; to improve safety standards and to require testing of substances, products and processes; to provide codes of practice for consumers and contractors; to set up a register of toxic and hazardous substances; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 4 May and to be printed. [Bill 135.]

GREENWICH HOSPITAL BILL [Lords]

Ordered,
That the Greenwich Hospital Bill [Lords] be referred to a Second Reading Committee.—[Mr. Greg Knight.]

Royal Assent

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

Education (Student Loans) Act 1990
Greater Manchester (Light Rapid Transit System) Act 1990
Happisburgh Lighthouse Act 1990

Orders of the Day — Enterprise and New Towns (Scotland) Bill

As amended (in the Standing Committee), considered.

New Clause 9

Winding up and dissolution of new town development
corporations

'For sections 36 and 36A of the New Towns (Scotland) Act 1968 there shall be substituted the following sections—

"Winding up of development corporation.

36.—(1) Where the Secretary of State is satisfied that the purposes for which a development corporation were established under this Act have been substantially achieved he may by order (a "winding up order") provide for the winding up of the corporation.

(2) Before making a winding up order the Secretary of State shall consult—

(a) the development corporation to which the order will relate.
(b) the council—

(i) of the region or islands area, and
(ii) of each district,
in which any part of the new town is situated, and

(c) such other person or body as he thinks appropriate.

(3) A winding up order shall name the day on which the winding up of the corporation is to commence and the day by which it is to be completed and may—

(a) stipulate a timetable for the winding up,
(b) require the corporation to make interim reports to the Secretary of State,
(c) require the corporation to comply with any directions made by the Secretary of State under section 36C of this Act,
(d) impose such duties, or confer such additional powers, in relation to the winding up as the Secretary of State thinks appropriate,
(e) revoke any order relating to the development corporation,
(f) contain such incidental, consequential, supplementary, transitional or ancillary provisions (including provision modifying the effect of any enactment as it relates to the corporation) as the Secretary of State thinks necessary or expedient.

(4) The Secretary of State may, after such consultation as is mentioned in subsection (2) above, by order vary any of the terms of a winding up order.

(5) An order under this section shall be made by statutory instrument which shall, if it contains provision modifying the effect of any enactment as it relates to the corporation, be subject to annulment in pursuance of a resolution of either House of Parliament.

Orders of the Day — Application of sections 35 etc. to operators of telcommunication systems

36A. Sections 35, 36B and 36D of this Act shall have effect as if references to statutory undertakers included references to operators of any telecommunications code system and as if for this purpose—

(a) references to a statutory undertaking were references to the running of such a system, and
(b) references to the appropriate Minister were references to the Secretary of State for Trade and Industry.

Additional power to dispose of property etc.

36B.—(1) Subject to the conditions set out in subsection (2) below and without prejudice to the powers contained in section 3, 18, 18AA or 18B of this Act, a development corporation may dispose of any of their property, rights or liabilities on such terms (including by way of gift) as they think fit to any person, including (without prejudice to this generality) Scottish Enterprise, the Scottish Development Agency, Scottish Homes, a local authority or a statutory undertaker.

(2) The conditions relating to the power conferred by subsection (1) above are that the power may be exercised only—

(a) with the consent (which may be general or specific) of the Secretary of State, and
(b) during the period from the day of coming into force of the winding up order until the date of dissolution of the corporation.

Direction and order making powers of Secretary of State

36C.—(1) Without prejudice to the power contained in section 4(2) of this Act the Secretary of State may, in relation to a development corporation who are subject to a winding up order—

(a) during the period from the date of coming into force of the order until the date named in the order as the date by which the corporation are to be wound up (the "winding up date"), give directions (which may be general or specific) to the corporation in relation to the winding up; and
(b) during the period from the winding up date until the date of dissolution of the corporation, give directions (which may be general or specific) to the corporation.

(2) In the case of a development corporation who are subject to a winding up order the Secretary of State may exercise the power conferred by section 5(2) of this Act without its having to appear to him that there are exceptional circumstances rendering such exercise expedient.

Orders of the Day — Transfer orders

36D.—(1) At any time after a winding up order has been made the Secretary of State may by order (a "transfer order"), made by statutory instrument and subject to annulment in pursuance of a resolution by either House of Parliament, provide for the transfer of any property, rights and liabilities of a development corporation to any person, including (without prejudice to this generality) Scottish Enterprise, the Scottish Development Agency, Scottish Homes, a local authority or a statutory undertaker.

(2) A transfer order may—

(a) transfer the property, rights and liabilities on such terms (which may include transfer either with or without consideration) as the Secretary of State may provide in the order,
(b) include provisions amending any enactment relating to Scottish Enterprise, the Scottish Development Agency, Scottish Homes, a local authority or a statutory undertaker for the purpose, or in consequence, of any transfer made to any such body by virtue of subsection (1) above, and
(c) contain any such incidental, consequential, supplementary or ancillary provisions as the Secretary of State thinks necessary or expedient for the purposes of the order.

(3) Any property, right or liability transferred to any person by a transfer order shall vest in that person on such date as may be specified in the order.

(4) If a person to whom any land is transferred by a transfer order wishes to complete his title to the land by expeding a notarial instrument or notice of title or otherwise, the order shall be deemed to be and may be used as a general disposition or assignation of the land in his favour.

Reduction of liability of development corporation.

36E.—(1) If the Secretary of State is satisfied that it is expedient, having regard to the provisions of any transfer order or proposed transfer order, that the liability of a development corporation in respect of advances made to them under this Act should be reduced he may, by order with the consent of the Treasury, reduce that liability to such extent as may be specified in the order.

(2) Section 46(6) of this Act applies to orders under this section.

Grants by Secretary of State.

36F.—(1) Where the Secretary of State is satisfied that a disposal of land by a development corporation or any transfer of land under a transfer order imposes or will impose a financial burden on the disponee or transferee he may make grants to the disponee or transferee of amounts to be determined by him with the consent of the Treasury.

(2) Where a development corporation are satisfied as mentioned in subsection (1) above they may make grants of amounts to be determined by them with the approval of the Secretary of State and the consent of the Treasury.

(3) Any grant made under this section may be given subject to such conditions as the granter thinks appropriate including (without prejudice to this generality) conditions requiring repayment of all or any part of a grant in the event of non-compliance with any other condition; and any consent given under this section may be general or specific.

Dissolution of development corporation.

36G.—(1) A development corporation shall, after the making of a winding up order relating to them, remain in existence until such date as the Secretary of State, after consultation with the corporation, appoints for their dissolution by order made by statutory instrument.

(2) The date appointed under subsection (1) above shall not be earlier than the date provided for in the winding up order for the completion of the winding up of the corporation.

Financial consequences of winding up.

36H. Any surplus arising from the winding up of a development corporation shall be paid into the Exchequer and any deficit shall be defrayed out of money provided by Parliament.".'.

Brought up, and read the First time.

The Minister of State, Scottish Office (Mr. Ian Lang): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to take the following: New clause 2—Development Corporation tenants' choice of landlord—
'In the period prior to and at the time of a winding-up order made against any development corporation the tenants of development corporation housing stock shall be allowed to exercise a choice of alternative landlord which must include the District Council within which the development corporation is situated.'.
New clause 3—Transfer of vacant houses to District Council—
'At the time a winding-up order is made against a development corporation all vacant houses shall be transferred to the District Council within which the development corporation is situated at a price to be negotiated and agreed upon by the parties involved.'.
New clause 8—Winding up and dissolution of new town development corporations—
'30. For Sections 36 and 36A of the New Towns (Scotland) Act 1968 there shall be substituted the following sections—
36.—(1) The Secretary of State shall require the Development Corporation—
(a) to undertake

(i) an environmental audit of parks, woodlands and recreational areas;
(ii) an audit of all other lands and buildings in the New Town, in their ownership or over which they have superiority rights;

within one month of the Enterprise and New Towns (Scotland) Act 1990 coming into force and shall be completed within four months thereof;
(b) to make available within one month of completion, the findings of the audits to:—

(i) the regional and district council in which the new town is situated, and
(ii) such other person or body as appear to him to have an interest.

(2) Where the Secretary of State is satisfied that the purposes for which a development corporation was established under this Act have been substantially achieved he may by order (a "winding up order") provide for the winding up of the corporation.
(3) Before making a winding up order the Secretary of State shall consult—

(a) the development corporation to which the order will relate,
the council—

(i) of the region or islands are, and


(ii) of each district,
In which any part of the new town is situated, and
(c) such other person or body as he thinks appropriate
(4) A winding up order shall name the day on which the winding up of the corporation is to commence and the day by which it is to be completed and may—

(a) stipulate a timetable for the winding up,
(b) require the corporation to make interim reports to the Secretary of State,
(c) require the corporation to comply with any directions made by the Secretary of State under section 36C of this Act,
(d) impose such duties, or confer such additional powers, in relation to the winding up as the Secretary of State thinks appropriate,
(e) contain such incidental, consequential, supplementary or ancillary provisions (including provision modifying the effect of any enactment as it relates to the corporation) as the Secretary of State thinks necessary or expedient for the purposes of the order.

(5) A winding up order shall provide that the regional and district council within whose area the new towns are situated, shall be entitled to invest, by equity participation or otherwise, in a local development company (set up to own and manage assets of the former new town development corporation within their area).
(6) The Secretary of State may, after such consultation as is mentioned in subsection (3) above, by order vary any of the terms of a winding up order.
(7) An order under this section shall be made by statutory instrument which shall, if it contains provision modifying the effect of any enactment as it relates to the corporation, he subject to annulment in pursuance of a resolution of either House of Parliament.

Application of sections 35 etc. to operators
of telecommunications systems

36A. Section 35, 36B and 36D of this Act shall have effect as if references to statutory undertakers included references to operators of any telecommunications code system and as if for this purpose—

(a) references to a statutory undertaking were references to the running of such a system, and
(b) references to the appropriate Minister were references to the Secretary of State for Trade and Industry.

Consultation by development corporation

36AA. (1) A development corporation shall, before disposing of any of their property, rights or liabilities and before entering into any agency agreements (whether by means of management buy-out agreements or otherwise) in respect of any of the development corporation's functions or services, consult and have regard to representations, related to any proposed disposal of such property, rights or liabilities which may be made by—

(a) Regional and District Councils within whose areas the new town is situated
(b) Scottish Homes and Scottish Enterprise
(c) any other body as they think appropriate

and shall advertise in a newspaper circulating in the locality any proposed disposals of property and consider any representations relating to it.

Orders of the Day — Additional power to disposal of property including houses etc.

36B (1) Subject to the conditions set out in subsection (2) below and without prejudice to the powers contained in section 18, 18AA or 18B of this Act, a development corporation may dispose of any of their property, rights or liabilities on such terms (including by way of gift) as they think fit to any person, including (without prejudice to this generality) Scottish Enterprise, the Scottish Development Agency, Scottish Homes, a local authority or a statutory undertaker.

(2) The conditions relating to the power conferred by subsection (1) above are that the power may be exercised only—

(a) with the consent (which may be general or specific) of the Secretary of State, and
(b) during the period from the date of coming into force of the winding-up order until the date of dissolution of the corporations.

(3) in granting consent as provided for in subsection (2) above, but also in respect or the period from the date commencement of this section, until the date of coming into force of the winding-up order, the Secretary of State shall ensure that each tenant of any house owned by a development corporation, if that house may be transferred or disposed of to a new landlord, shall have the right to choose that the new landlord shall be one of the following bodies

(a) the district council in which the new town is situated,
(b) Scottish Homes or
(c) such other body as may be approved for that purpose by Scottish Homes,

provided that the tenant's choice of landlord is agreed by that body.

Direction and order making powers of Secretary of State

36C.—(1) Without prejudice to the power contained in section 4(2) of this Act the Secretary of State may, in relation to a development corporation which is subject to a winding up order—

(a) during the period from the date of coming into force of the order until the date named in the order as the date by which the corporation is to be wound up (the "winding up date"), give directions (which may be general or specific) to the corporation in relation to the winding up; and
(b) during the period from the winding up date until the date of dissolution of the corporation, give directions (which may be general or specific) to the corporation.

(2) In the case of a development corporation which is subject to a winding up order the Secretary of State may exercise the power conferred by section 5(2) of this Act without its having to appear to him that there are exceptional circumstances rendering such exercise expedient.

Transfer orders

36D—(1) At any time after a winding up order has been made the Secretary of State may by order (a "transfer order"), made by statutory instrument and subject to annulment in pursuance of a resolution by either House of Parliament, provide for the transfer of any property, rights and liabilities of a development corporation to any person, including (without prejudice to this generality) Scottish Enterprise, the Scottish Development Agency, Scottish Homes, a local authority or a statutory undertaker.

(2) A transfer order—

(a) shall transfer the property rights and liabilities in land including the superiority thereof held on feu or lease or otherwise held, occupied or used at the date this Act is passed or subsequently, by a local authority for the performance of its statutory or other duties or powers or functions to such local authority, on such terms as the Secretary of State may provide in the Order.
(b) may transfer the property, rights and liabilities on such terms (which may include transfer either with or without consideration) as the Secretary of State may provide in the order, provided that no such property, rights or liabilities shall be transferred to a local authority unless there has been prior agreement between that authority, the development corporation and the Secretary of State as to the terms upon which the transfer is to be made.
(c) may include provisions amending any enactment relating to Scottish Enterprise, the


Scottish Development Agency, Scottish Homes, a local authority or a statutory undertaker for the purpose, or in consequence, of any transfer made to any such body by virtue of subsection (1) above, and
(d) may contain any such incidental, consequential, supplementary or ancillary provisions as the Secretary of State thinks necessary or expedient for the purposes of the order.

(3) Any property, right of liability transferred to any person by a transfer order shall vest in that person on such date as may be specified in the order.

(4) If a person to whom any land is transferred by a transfer order wishes to complete his title to the land by expending a notarial instrument or notice of title or otherwise, the order shall be deemed to be and may be used as a general disposition or assignation of the land in his favour.

Reduction of liability of development corporation

36E—(1) If the Secretary of State is satisfied that it is expedient, having regard to the provisions of any transfer order or proposed transfer order, that the liability of a development corporation in respect of advances made to them under this Act should be reduced he may, by order made with the consent of the Treasury, reduce that liability to such extent as may be specified in the order.

(2) Section 46(6) of this Act applies to orders under this section.

Grants by Secretary of State

36F—(1) Where the Secretary of State is satisfied that a disposal of land by a development corporation or any transfer of land under a transfer order imposes or will impose a financial burden on the disponee or transferee he may make grants to the disponee or transferee of amounts to be determined by him with the consent of the Treasury.

(2) Where a development corporation is satisfied as mentioned in subsection (1) above they may make grants of amounts to be determined by them with the approval of the Secretary of State and the consent of the Treasury.

(3) Any grant made under this section may be given subject to such conditions as the granter thinks appropriate including (without prejudice to this generality) conditions requiring repayment of all or any part of a grant in the event of non-compliance with any other condition; and any consent given under this section may be general or specific.

Dissolution of development corportion

36G—(1) A development corporation shall, after the making of a winding up order relating them, remain in existence until such date as the Secretary of State, after consultation with the corporation, appoints for their dissolution by order made by statutory instrument.

(2) The date appointed under subsection (1) above shall not be earlier than the date provided for in the winding up order for the completion of the winding up of the corporation.

(3) At a date not later than dissolution a number of houses for allocation to the homeless, as may be agreed by the development corporation and the district council, and failing such agreement, as may be determined by the Secretary of State, shall be transferred to the district council in which district the new town is situated.

Orders of the Day — Financial consequences of winding up

36H—Any surplus arising from the winding up of a development corporation shall be paid into the Exchequer and any deficit shall be defrayed out of money provided by Parliament."'.

Mr. Lang: New clause 9 reintroduces the original clause 30. Interestingly, its content is replicated in a new clause

tabled by the Opposition and grouped with it, which illustrates the opportunist and frivolous approach that the Opposition took to eliminating the clause in Committee.
For the benefit of the House, I should explain that the clause replaces sections 36 and 36A of the New Towns (Scotland) Act 1968 with a series of new sections on the procedures to be adopted for the winding up and dissolution of the five Scottish new town development corporations. We debated the provisions of the clause extensively in Committee and I will summarise that debate. The clause extends the scope for the development corporations to dispose of their property, rights and liabilities, and empowers the Secretary of State to make directions and orders, including wind-up and transfer orders, for the transfer of property, rights and liabilities affecting the development corporations up to and at dissolution.
It also empowers the Secretary of State to relieve, by making grants, any financial burden imposed by the transfer of corporation property. The clause is essentially enabling, designed to ensure that sufficient scope is left to ensure a smooth winding-up process, consistent with the intent of the architects of the original 1946 legislation. Wind-up has been implicit for new towns since the outset, and it is generally recognised that the new towns, at varying stages of maturity, are reaching the time when wind-up is appropriate and necessary.
We intend that wind-up orders will be made in 1991 for East Kilbride and Glenrothes, and those corporations will be dissolved no later than 1994. Cumbernauld will begin winding up in 1993, Livingstone in 1995 and Irvine in 1996. Winding up will normally take place over three years, after which corporations will be dissolved. It is important to handle this matter sensibly, and we are anxious to maintain the momentum—particularly the economic momentum—established by the towns while they have had special legislative protection and support from the taxpayer.
The economic benefits that the new towns have generated for themselves, for their surrounding areas and for Scotland as a whole are too significant simply to wind up the towns without providing for a smooth transition. In the last year alone, more than 5,000 new jobs were established in the towns, where unemployment rates are well below those of the surrounding areas, having halved in the last three years. Even since we have debated the Bill in Committee, we have had excellent news about Conner Peripherals in Irvine and NEC's expansion in Livingston, I announced Locate in Scotland's annual results earlier this week, in which the new towns played a prominent part.
It is intended to make sure that satisfactory arrangements are in place before any corporation is wound up. We have concluded that the most effective way to take forward development in the towns will be through the private sector by way of a local development company, the principal role of which would be to own and manage a portfolio of industrial and commercial assets of the former development corporations and to undertake new property development on a commercial basis as it judges appropriate. In addition, and for a limited number of years, the company will undertake certain public sector functions under contract in the new town area.
A local development company vehicle offers three main advantages. The first is the potential for the introduction of a substantial private sector involvement in the on-going


economic development of the towns. The second is the disposal of a significant part of the industrial and commercial assets. The third is the assured continuing delivery of certain key activities—promoting, marketing and support for the attraction of inward investment; property development; and business support and advisory services.
Housing is an important issue and undoubtedly one which concerns local residents, so we devoted considerable time to it in Committee. It is clear that the housing argument in the new towns is moving our way. Our support for diversity and variety is just what people want. That is why more than 30,000 tenants have bought their own homes and that is why housing associations are being set up and expanded. I know that district councils and Opposition Members have been quick to press the claims of councils to take over development corporation housing, but there is no sign of a demand among tenants to transfer to district councils. There are many more applications to move from councils to the development corporations. Most tenants—four fifths of them in a recent survey—want to make their choice at wind-up. I agree with them that that is the right time to choose. Our priority now is to make sure that they are aware of the alternatives.
We had a thorough and wide-ranging debate on this clause in Committee. The hon. Member for Clydebank and Milngavie (Mr. Worthington) said:
There is some cross-party agreement on this issue in that both parties accept the success of the new towns and that at some stage there must be winding-up."—[Official Report, First Scottish Standing Committee, 27 February 1990; c. 439.]
By tabling their own new clause, the Opposition have made it plain that they accept the fact of wind-up.
I should draw attention to one addition in the clause as now proposed. On Second Reading, the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg) specifically raised the matter of the proposed transfer of planning functions from development corporations to local planning authorities. He also asked how and when this transfer would take place. The new clause includes a further technical provision—section 36(3)(e)—for the Secretary of State to have powers to
revoke any order relating to the development corporation".
That provision will allow the special development order for any town to be revoked by the winding-up order and to be an integrated part of the wind-up process. It will not necessarily mean that the revocation of the special development order will take effect at the start of wind-up. The precise timing will be influenced by such matters as the state of readiness of local plans. The availability of this power should, however, facilitate a smoother transition, and to this end we have also added an explicit provision at new section 36(3)(f) allowing the winding-up order to contain transitional provisions.
The new clause is essential to the Bill and to the new, robust free-standing picture of the new towns in Scotland.

Mr. Tony Worthington: The Minister said that our new clause is the same as the Government's, so the Government should have no problem in accepting our new clause, which asks them to give tenants of development corporations the right to choose to become tenants of the district council if they so wish. I wait for the Minister to say that he accepts that, but clearly he does not.
The Government are denying tenants of development corporations in Scotland the right, given to development

corporation tenants in England, to transfer to district councils in the 17 new towns that were wound up there. Up to 1984, the Government agreed that development corporation housing should go to the district. The right hon. Member for Ayr (Mr. Younger) was not in Committee on the morning when the Government lost the new towns windup clause, but, on Second Reading, he was clearly under the impression that things were as they were when he was Secretary of State for Scotland.

Mr. Norman Hogg: My hon. Friend will recall that I attempted to get answers on this matter from the right hon. Member for Ayr (Mr. Younger). Would my hon. Friend care to comment on the fact that the winding up of new towns in England was undertaken when the right hon. Member for Henley (Mr. Heseltine) was Secretary of State for the Environment? Perhaps we could look forward to a more enlightened approach to this wind- up if, between now and the general election, he was to be promoted to glory.

Mr. Worthington: We do not have to wait for the right hon. Member for Henley (Mr. Heseltine) to be promoted, because the new towns will be wound up under the Labour Government, who will give development corporation tenants the right to become district council tenants if they so wish.
Late last year, the Department of the Environment issued consultation papers that gave that right to council tenants. Our view is clear. It is fine by us if development corporation tenants want to do any of the following things: become owner-occupiers, vote to become a tenant of a management buy-out, join a co-operative, join a housing association, become a tenant of Scottish Homes. However, new town development corporation tenants have said overwhelmingly that they want to become tenants of the local district councils. We would give them that choice, but it is denied them by the Government.

Mr. Bill Walker: If I heard the hon. Gentleman correctly, he complained earlier that the law in Scotland would be different from the law in England—that was the substance of his comments. If that is so, can he give us an assurance that if there is a Labour Government they will ensure that Scotland has the same laws as England, as they affect the new clause, and also that that would be true of the roof tax?

Mr. Worthington: I was simply trying to make the point—and I think I did so effectively—that choice is being denied to tenants by the Scottish Office. Nothing that we are asking for is out of line with what the Department of the Environment is doing. The Department would allow development corporation tenants of English new towns to transfer to the district council. The Scottish Office and the Minister have decided to deny Scots that choice. The Minister must still be trying to get brownie points with the Prime Minister at a time when it does not matter whether he gets them.
In Committee, there was great embarrassment when a dawn raid occurred at 10.30 am, and two Conservative members of the Committee, who had not managed to get up by that time, failed to arrive and we voted out a clause. Therefore, the Bill as it stands is very strange, because the crucial clause on new towns is missing from the second part of the Bill. There are two major aspects to the part of


the Bill that we are discussing and they are both addressed by our new clause. The first is the importance of wind-up to the new towns, and the second is the importance of the new towns to Scotland.
The key issue is the right of tenants to choose district councils as landlords. We demand that district councils should be available as an option. Some 89 per cent. of tenants in a recent survey thought that district councils should be one of the choices. We write that into our new clause. There is nothing revolutionary about that. Until 1984, that was accepted in England and Wales, where 17 new towns have been wound up. The only exception to the rule was Runcorn, because the local district council, for its own reasons, did not want to be a housing authority.
The history of the issue is that, until the mid-1980s, new towns in England and Wales that were wound up had their housing stock transferred almost automatically to the relevant district council. Then the Government decided that more choice should be available. The Housing and Planning Act 1986 contained a provision to enable new town dwellings to be transferred to bodies other than local authorities, but local people still had the right to choose the district council.
A ballot was held in Peterborough in October and November 1987 and when the result was announced in December, 93 per cent. of tenants of an 85 per cent. turnout wanted to transfer to the district council. We want the same rights to be given to tenants in East Kilbride, Glenrothes and the other new towns in Scotland as were given to tenants in Peterborough.
In August 1988, the Department of the Environment issued a consultation paper entitled, "New Towns Housing Transfer" in which plans were announced to repeal part III of the New Towns Act 1982 in favour of new transfer arrangements enabling approved landlords to compete with district councils, but local people still had the right to transfer to the district council.
As recently as 1989, the Local Government and Housing Act—in section 172(2)—made it quite clear that in new towns in England and Wales people can transfer to district councils within whose district the dwelling is situated, or to an approved landlord.
On 11 October 1989, in another place, Lord Hesketh said:
The Government will bring forward regulations which will include the detailed provisions for such tenant consultation. They will include a ballot in which we would expect tenants to be able to choose between the district council and a landlord approved by the Housing Corporation.
The Minister finds ballots extremely difficult. To paraphrase what he said in Committee, ballots are difficult because they narrow the choice—they make one say yes or no, and that is unacceptable to the Minister.

Mr. Adam Ingram: My hon. Friend was paraphrasing what the Minister said in Committee. The accurate quote is:
A ballot is potentially a difficult and dangerous course of action."—[Official Report, First Scottish Standing Committee, 6 March 1990; c. 539.]
That sums up how the Government view the democratic choice facing new town tenants in Scotland.

Mr. Worthington: The Minister has a very limited vocabulary. It consists of the words "flexibility" and

"choice" and he does not know the meaning of choice. We are trying to tell him that it means that one could choose between alternatives.
I am sure that there is considerable resentment in the new towns about the leaflet that was sent to tenants to tell them that they have a choice—that was the title of the leaflet. However, choice excludes the number one option for tenants.
Lord Hesketh said that even at that stage—in 1989—the Government intended to continue to offer a choice in England and Wales. He said:
It is proposed that the tenants would be offered a choice between the local council and an approved landlord as the future owner of their homes."—[Official Report, House of Lords, 11 October 1989; Vol. 511, c. 490–91.]
That is all that we ask for in the Bill. It is puzzling why the Scottish Office have made a universal declaration of independence. It is not good enough for the Minister to say that at some stage in the future—at wind-up—they may allow a choice, because we know what will happen during the next few years. The full Government propaganda machine will go into operation, and people will be persuaded to choose immediately because of the fears that the Government will be stirring up.
The only honest thing that the Government can do is to tell people now that there will be a choice which will include the district councils as possible landlords if tenants so wish.
The Government are clearly desperately embarrassed about the situation. In Committee, the Minister used some strange language when he was talking about the "strong preference" of 40 per cent. of people who showed an interest in owner-occupation, but the "bare" 50 per cent. who thought that they would choose the district council at wind-up. According to the Minister, the Government are seeking to achieve choice, but they do not want people to choose now. We do not think that people should be making choices now, but they should know that choice will be available at wind-up.
The point that I am making will be exemplified and elaborated by my hon. Friends who represent the five new towns in Scotland. They will express the authentic views in the new towns in Scotland. It is strange that although the new towns are success stories, the Government and the Tory party have failed to achieve any representation in those areas. If the Government continue denying choice to the residents of new towns, they will do even worse in those areas in future.
As I said in Committee, it is not simply a question of the right of tenure. We accept the case for some variety in the choice of tenure of housing in the new towns. It is not simply a question of different systems of tenure and the right to choose a landlord; it is the right to choose where one lives. It is the right of residents of East Kilbride, Glenrothes, Irvine, Cumbernauld or Livingston to continue to live in the new towns. The other options that the Government put forward give far too much weight to the depth of one's pocket in whether one can live in that area. For many people with modest incomes their only real chance of continuing to live there or being given preference over newcomers, would be through district councils playing a major role in housing policy in those areas.
Many other issues affect the new towns. The Government have said, and we accept their intention, that it is extremely important to maintain the momentum of economic development in the new towns. However, the


way in which the Government are going about that is not maintaining that momentum. I am sure that all my hon. Friends who represent new towns will confirm that the impression going around is that the new towns are going out of business simply because the development corporations are going out of business. That is lessening their competitive edge in comparison with areas such as the north-east of England. It would have been much more satisfying if we had been given a satisfactory explanation in Committee of the role of the local development corporations. We were not denied that for any malign reason, but because the Government do not know.
So that other hon. Members can have a fair share of the debate, I shall conclude. I repeat to the Government that it is unacceptable to deny tenants the opportunity to transfer to the tenancy that they want. Why is the number one choice being denied? What is in it for the Government to create indecision and uncertainty and to make people worry—particularly elderly people who do not want to buy?

Mr. Ingram: They cannot afford to buy.

Mr. Worthington: My hon. Friend the Member for East Kilbride (Mr. Ingram) is quite right.
Why will the Government not realise the good sense of new clause 2, which makes it explicit that we will offer the residents of new towns and the tenants of the development corporations the choice of landlord and that choice must include the local district council?

Mr. David Lambie: As a representative of the youngest new town—Irvine, in the district of Cunninghame—I am pleased to take part in today's debate.
When we are discussing a Scottish Parliament and more independence for the Scottish people, Mr. Speaker keeps reminding us that this is a United Kingdom Parliament. The Under-Secretary for State for Scotland, the hon. Member for Stirling (Mr. Forsyth), who is also chairman of the Tory party in Scotland, appears on television, on the radio and in the newspapers every week reminding the Scottish people of the benefits of being members of the United Kingdom Parliament. That is why I am disappointed that the Government should be introducing new clause 9 as a replacement for clause 30 which they lost in Committee.
5.45 pm
The Government had a majority in Committee and it was their job to ensure that Government policy was carried during the debate on clause 30. They failed to get Scottish Conservative Members to come upstairs and vote. Now, because the Scottish Tory Members failed them, the Government will depend on English Tory Members. At 7 o'clock tonight, when we vote on a matter dealing primarily with Scots who live in Scottish new towns, the clause will be reintroduced as a result of the votes of the English Tory majority, mainly from the south-east of England. That is discrimination against the Scottish people and shows that the sooner Scottish representatives are away from this place the better it will be for Scotland and for the people who live there.

Mr. Jim Sillars: Does the hon. Gentleman agree that it is even worse than he says, because tonight English Tory Members of Parliament will be

voting down majority Scottish opinion although in England they applied the same standard that we are arguing for today?

Mr. Lambie: I accept what the hon. Gentleman says. I intended to make the same point to reinforce what was said forcefully by my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington). The Government are not only bringing in English Members of Parliament to vote against Scottish political opinion, especially that of the representatives of the new towns in Scotland, but they will be voting against what they introduced in the legislation applying to tenants of the English new towns. That is why I make this last-minute appeal, to the Government and to those English Conservative Members who are to be used as Lobby fodder tonight, to change that policy and to withdraw the new clause.

Mr. Bill Walker: Will the hon. Gentleman give way?

Mr. Lambie: I shall not give way, because I promised not to speak for long.
I represent Irvine, the youngest new town, where the winding-up order will be published in 1996 and the new town wound up in 1999. There will be at least two general elections before the effects of the Bill apply to Irvine. I know that, after the next general election, when there is a Labour Government, we shall rescind this legislation and the fears of my constituents, the tenants in Irvine new town, will be removed.
The Government are offering new town tenants certain options, if they do not wish to buy or to take part in any schemes involving mortgages which will give them the right to buy. Among those options is to hand over the houses to Scottish Homes when the new town has been wound up. The people in Irvine new town are afraid of the policies of Scottish Homes. I am not prepared to say whether those fears are justified. They think that Scottish Homes was brought into being as a Tory Trojan horse to eliminate the public rented sector. I believe that my constituents are correct to be afraid of Scottish Homes.
The other option for tenants is to become tenants of organisations such as Quality Street, a private sector limited company which tenants fear is interested only in making money. In every vote taken, new town tenants have always chosen Cunninghame district council as their landlord.
I hope that at this late stage the Government will rescind their decision to go it alone in Scotland, implement the policy that was accepted for England and give the tenants of Irvine development corporation the opportunity to become tenants of Cunninghame district council when the new town is wound up.

Mr. Bill Walker: I shall be brief, because hon. Members representing new towns should be given an adequate and fair hearing. I hope that they will understand that my being brief means not that I could not speak at length but that I believe that they should be heard.
The hon. Member for Cunninghame, South (M r. Lambie) made great play of the fact that the Government are introducing legislation for Scotland different from that for England. That comes rich from a member of a party which, when in government, enacted provisions for


revaluation every five years in Scotland but not in England and Wales. I could give a long list of similar points, but I will not do so.
The hon. Member for Cunninghame, South should bear in mind the fact that Scottish Homes is the inheritor of the Scottish Special Housing Association, which did a good job, and of the housing associations, which have a long and distinguished record in Scotland. To suggest that the new body, Scottish Homes, is less than Scottish or something of which we cannot be proud is nonsense—it is Scottish, and it will be run by Scots for Scots.
Of course we are different in Scotland. We are always telling people that we want to be different. Yet when the Government introduce legislation making Scotland different, all we get is girning and greeting from Opposition Members.

Mr. Ingram: I certainly will not be as brief as the hon. Member for Tayside, North (Mr. Walker), who made not a genuine contribution to the debate but a mere interruption.
When Opposition Members voted down clause 30, the Minister accused them of being frivolous and opportunistic. The truth is that a Whip was at fault in not ensuring that Conservative Members were present to vote. The vote went deeper than that, because it showed the indifference of Scottish Tory Members to voting on such an important issue. It was not frivolous or opportunistic, but a clear statement of the views of the people of the new towns on what was happening in Committee.
I said after the vote that, if the Minister had been more willing to listen, more flexible and more prepared to take on board the broad consensus on the arguments being advanced, I would not have voted against the clause. His inflexibility and unwillingness to listen forced Labour Members into that action. There is nothing wrong in our tabling new clause 8, which reflects the principles that we tried to advance in Committee, but without any response from the Minister.

Mr. Bill Walker: rose——

Mr. Ingram: If the opportunity arises, I might give way to the hon. Member for Tayside, North. I am conscious of the fact that other hon. Members who represent new towns want to speak in the debate.
Everyone involved in the new towns, not only Members of Parliament or local representatives but residents and tenants, are deeply concerned about what the future holds. In Committee, I mentioned comments made to me by industrialists in Irvine, one of whom asked, "Who will speak for industry when the development corporations are wound up?" No one could answer that. Opposition Members cannot say what is in the Government's mind, but the Government are not saying who will speak for industry when the development corporations are wound up.
There was deep disillusionment and disappointment about what happened in Committee. Everyone recognised that, at some stage, the new towns would have to be wound up. There were constructive responses to the Green Paper—although perhaps they were not what the Government wanted to hear—but there were gasps of surprise at the drafting of the White Paper and people were stunned by the lack of detail in the Bill. They waited to see

whether any flesh would be put on the bones of the Bill in Committee. The Minister was probed and pushed by Opposition Members about how the considerable assets that the new towns have built up over the years were to be disposed of and how they would be managed in the future for the greater good of not only the new town communities but the wider communities in which they exist and the Scottish economy. He was further probed and pushed on local authorities' role in the management of those assets and what the role, structure and function of the vague body called the local development company would be when it was given their industrial and commercial assets to manage.
The local development company is not mentioned in the Bill, yet in Committee the Minister said that it is a key element in Government policy. When we tried to question him about it, we were simply pushed aside, because, as my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) said, he does not know what it will do. The answers that we were given were evasive and shifty. The minds of the people who are aware of the success of the new towns were not put at rest by the Minister's approach.
Attempts were made in Committee to include in the Bill the basic principles now set out in new clause 8. They were watered down following the arguments in Committee in the hope that the Minister, even at this late stage, would respond to the wide concern that has been expressed.
I repeat the point that was made in Committee about the need for a proper economic audit of the assets of the new towns. The Government say that they will conduct an audit of the recreational, environmental and parks assets of the new towns, but they are not prepared to conduct an economic audit of the industrial, commercial and land assets of the new towns. They are saying, "All that detail is contained in the annual reports of the new town development corporations; go and find it yourselves." That is disgraceful. A proper portfolio of what the new towns are worth is required.
We do not agree with the Government's proposed method of disposing of the new towns' assets, but none the less there is a need to understand their total worth. The Government are not prepared to concede that, because, I suspect, they do not want people to be aware of their total worth. They want to give away those considerable assets, all of which were built and developed at public expense, at knock-down prices. In Committee, the Minister said that the understanding of the worth of the assets is essentially an administrative matter, but that is not the view of the people of the new towns. It is essential to their understanding of what will happen when their communities are wound up that they should understand the worth of those assets.
Local authorities have asked to be able to purchase, through equity participation, a share in the local development company. It is accepted that the Government will press ahead with that body. The local authorities say, "If that is to happen, can we have a role in the development and management of our town?" We made this request in Committee. Will the Minister please concede the point? Will he instruct or advise the new town development corporations, over which he has direct control, to allow the local authorities to have not a controlling place, but simply a place on the board? If the Minister does that, he will mirror the arguments that he claims to support in relation to the private and public


mixture which is supposed to be for the good of the Scottish economy. When we made that appeal for the new towns, we were told that it was a matter for the development corporations. The Minister is not prepared to give that simple advice or instruction to the development corporations.
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Through new clause 8, we are asking the Minister to recognise that local authorities should have the right to buy equity participation, and I should like to hear what objections he has to that proposal. I again ask the Minister, as I did in Committee, to give a green light to that concept, because it will encourage the development corporations to involve local authorities in the development of their towns.
I shall leave it to my colleagues to refer to the need to consult on wind-up about transportation. It is unbelievable that a consultation process is not enshrined in the legislation. The Minister said that consultation would take place, but I do not trust the Minister or the Government to consult properly with any level of representation within the new towns. The hon. Gentleman dismissed the concept of ballots as too democratic—perhaps resulting in the wrong answers, according to his thinking.
I have been involved in housing matters since I moved to East Kilbride 20 years ago and since I have been a local authority representative, leader of the council and the Member representing that new town. The choice to be given to new town tenants is a major issue in the new towns, as my hon. Friends the Members for Clydebank and Milngavie and for Cunninghame, South (Mr. Lambie) pointed out. That view cuts across the whole community—not only people who live in development corporation houses but those who have bought their houses and whose children would expect one day to be able to get a district council house or, if in a new town, a development corporation house. They are worried about what the future holds. The Minister has not said anything of any substance on that score.
We need from the Minister a clear statement that he has revised his thinking and realised how inflexible he has been over the past year and a half since this exercise started and this matter was considered in Committee. He has consistently refused to grant tenants that right and has caused unease in the minds of residents and tenants of new towns. This is not a party political point—it cuts across the breadth of the community. It is a point about tenants who are worried about what the future holds for them and for their families in terms of the opportunity to get a development corporation house.
Worry is felt not only by the people who live in the new towns but by the officials. I have received a document written not by my new town development corporation but by the Glenrothes development corporation. It was dated 20 February 1990 and was considered by the development corporation's board. It made four main points about the concern felt by those who manage the houses. The development corporation said:
The uncertainty in this matter is to continue.
The officials commented on the survey of tenants in Scottish new towns and, contrary to the Minister's consistent interpretation of such surveys, said:
It is clear from the Survey findings that a substantial majority of our tenants would, if required now to make a choice, choose the District Council.

Everyone holds that view, except the Minister. It prevails within the new towns. The chief officers of the development corporation concluded:
in order to remove uncertainty on the part of our tenants, it is desirable that the Government should announce now whether when the Corporation is wound up its tenants will be permitted to transfer to the District Council. The Corporation is invited to say whether representations on these lines should be made to the Industry Department for Scotland.
I do not know whether those representations were made, but I referred to that development corporation document because it showed that the professionals—even those who may be interested in a management buy-out—recognise the fear of the people whom they have tried to place in houses and over whose interests they have so much control. I should be interested to hear whether the Minister has received a report from Glenrothes development corporation and whether he is prepared to move from his inflexible position.
The point about English legislation needs to be repeated. This is a valid point, unlike the case that was trivialised by the hon. Member for Tayside, North. All Members voted for that legislation. It is not English versus Scottish legislation. The correct legislation applies to England. The same principle, not necessarily the detail, should apply to tenants in Scotland who will be affected by the wind-up orders. They should be allowed to "choose" the district council as a landlord, rather than "say" that the district council "will" be the landlord.

Mr. Bill Walker: I would not wish the hon. Gentleman to think that, because I made a brief intervention, I was being trivial. I was not. The Labour party thought that it was right to introduce fundamental legislation on revaluation which had an impact on every council house tenant and ratepayer. One can argue about the details, but I cannot accept the hon. Gentleman's principle. The Labour Government introduced legislation providing for separate revaluations. That was important fundamental legislation and there was nothing trivial about it. The Labour Government introduced it on the principle that it was right to legislate differently for Scotland.

Mr. Ingram: The hon. Gentleman shows us that, whether his interventions are brief or long, they are always trivial.
Reference is made in new clause 3 to an important aspect which was argued about in Committee—vacant houses. It has been proposed in certain new towns that vacant houses should be sold off either in management buy-outs or to other housing entrepreneurs and that the new owners would manage the housing stock. I have heard about a price in my new town of East Kilbride of £4.,000 a house. That is a ridiculous price for an asset which may be worth up to £50,000—for example, newly built houses in green environments. It is unacceptable.
In new clause 3, we have said that, because of the growing homelessness in the new towns and the demand for housing, the Minister should at least accept that vacant property should be transferred to the district councils on wind-up at a price to be agreed between the development corporation and the district council. That is not such a radical concept. The approach proposed in new clause 3 is the proper approach to adopt: those houses should he transferred to the district council.
I hope that the Minister will show himself more responsive and flexible in dealing with these most important issues than he has in the past 18 months.

Mr. Barry Porter: The House may wonder why I should have the effrontery to intervene in Scottish matters. My mother's maiden name was Brown, which does not help much. My father served in the Liverpool Scottish military forum in the war and was later transferred to the 51st Highland division. I do not like porridge very much, but I prefer Loch Fyne kippers to Manx kippers. It could be said that that gives me my credentials, but the real reason why I choose to intervene is that, as a number of hon. Members have said, this is a United Kingdom Parliament. Unless the hon. Member for Glasgow, Govan (Mr. Sillars) gets his way, I shall continue to speak in a United Kingdom Parliament on Scottish, Irish and Welsh affairs, as I shall on English affairs and on any other affairs that may be appropriate.
I have listened with interest to a debate about housing. I have great pleasure in supporting the Government's housing policy over the past 10 years, but one or two matters concern me. It appears from the arguments advanced by Opposition Members that there is some block on district councils having the right to choose to become landlords in due course. I must say to my hon. Friend the Minister of State that the document provided by the great and glorious Conservative central office does not back up that view. I quote:
The Bill proposes that district councils should not be the automatic inheritors of new town housing at wind-up.
Fine; that is super by me. But the central office brief continues:
They remain an option among a number of other possibilities.
Will my hon Friend confirm that, to be the case, and that when the wind-up is completed, the option of a partial transfer to district councils is not ruled out? Whether or not the district councils are dreadful, awful, demented or mad is of no consequence to me. If the Scots choose to elect such people, that is a matter for them; they must suffer the consequences.

Mr. Worthington: The hon. Gentleman is making a helpful speech. The handout to which he referred says that, at some stage in the future, the choice of going to district councils may not be ruled out. What we ask is quite simple—that that choice should be ruled in now, because if it is not ruled in now it will be open to a Government of the present Government's disposition to rule it out in future. Does the hon. Gentleman agree that we are being reasonable?

Mr. Porter: The answer to that is that I do not know, because I am waiting to hear from the Minister precisely what the position is. I must add, however, that I shall need to be convinced that there is some specific reason why Scotland should be treated in a different way from England and Wales. In the absence of my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) and as his PPS, I have to say that I remain to be convinced. If the Scottish people wish to treat their district councils in a certain way, which may be different from what we should like, that must be a matter for them—otherwise, what is the point of having local government?

Mr. Norman Hogg: I listened with interest to the Minister of State. Judging by his remarks about the Government losing clause 30, he cannot have attended the same sitting of the Standing Committee as me. Nobody was being frivolous; what happened was that Conservative

Members failed to turn up. My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) described an event that took place at half-past 10 in the morning as a dawn raid. I can only conclude that, once upon a time, he worked at a college or somewhere similar. But whatever kind of raid it was, it was certainly successful.
My hon. Friend the Member for East Kilbride (Mr. Ingram), who made an excellent contribution today and made excellent contributions on behalf of new town tenants throughout the Committee proceedings, was right to take the Minister to task for saying that the event was frivolous. The clause was lost because Conservative Members were dilatory in performing their parliamentary duties.
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I view the setting up of the local development companies with some concern. I am sorry that the Minister has not felt able to say that he hopes that these commercial organisations—that is what they will be—will none the less accept the principle of having local authority representatives on their boards. There is no difficulty with that; it happens in other organisations, including commercial organisations, and there is no reason why it should not happen with the local development companies. I am surprised that the Minister is not encouraging it.
The development corporations themselves have greatly benefited from the presence of local authority representatives. Over the years in Cumbernauld, the development corporation has had representatives from the Labour party, the SNP and the Conservative party, although none of the Conservative representatives came from Cumbernauld, because, as we all know, Cumbernauld is a Tory-free zone.
The development corporations have benefited from the experience of local authority representatives and from their knowledge of local conditions. It is a sad day if the Government now so disapprove of local government and if the principle of local government is so ideologically unacceptable to them that they are prepared to reject altogether the idea of local authority representatives. The local development corporations will be the poorer for their mistake.
The Government information—not only on housing but on inward investment—that is reaching those who live in the new towns and industrialists with factories in the new towns is very scant indeed. I hope that the Scottish Office will do something to improve that. It is to the credit of local newspapers and their editors that the information has found its way to the people through them. Even at this late stage, however, there is a shortage of information about what is intended.
We have concentrated today on housing, and that must be right. I am sorry that the Government have not taken into account any of the representations that they have received from SLANT—Scottish Local Authorities with New Towns. I fear that that is because, yet again, they do not think that local government has anything to say about anything that they might want to listen to. That is a great mistake. SLANT was set up by my hon. Friend the Member for East Kilbride when he was leader of East Kilbride council, Councillor Rosemary McKenna, who subsequently became the provost of Cumbernauld, and myself to help all those concerned with the winding up of the new towns development corporation.
It is to be regretted that, once again, the Government have set their face against any view that the local authorities may wish to express. They have ignored the local authorities just as they have ignored the hugely well-attended public meetings in my constituency. I have never seen anything like it except during a general election campaign. In various areas of my new town, we have had numerous meetings attended by more than 100 people. I am sure that the largest meeting that my hon. Friend the Member for Clydebank and Milngavie has attended since he became Opposition spokesman was the meeting that we had in my constituency when we met the people of Carbrain to discuss the wind-up.
All those people have said the same thing. They want the option of the district council as their landlord. No one in the Labour party or in any other political party is telling tenants of corporation houses that they should become council tenants. We accept that housing associations and co-operatives are options. I reluctantly accept that choice must include private landlords. However, it is unacceptable for the Government to tell tenants that they cannot choose the district council as landlord until the end of the process. The Government are saying that the district council might only then be a choice. That is disgraceful.
We have had this Conservative Government for a long time. I am sorry that they talk about choice, but tell people, "We know what's good for you and we will tell you how to behave." If that is contemporary Conservatism as expressed by the Minister of State, we will be saying farewell to him at the next general election. I hope that, even at this late hour, the Government will have regard to the views of the people who live in the new towns.

Mr. Robin Cook: By the nature of our proceedings, this debate on the Government's new clause is rather more open-ended than I had anticipated on Second Reading. I understood initially that the open-ended nature of our proceedings tonight was the result of what I had hoped was a wise and fair-minded decision of the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) to absent himself from a critical vote in Committee. However, I more readily comprehend his absence in that I understand that the vote took place at dawn.
The happy result of that misunderstanding is that the House faces a choice between two very different new clauses on the wind-up of the new towns. The critical difference lies in the treatment of the housing stock. Before I consider that, I want to respond to the observations by the Minister of State about industrial promotion in new towns following the wind-up.
When the Minister of State described a development company in Committee, he made it perfectly plain that it would be a commercial operation. He said:
The development company will be a Companies Act company, with a normal share structure, board of directors and articles of association. It will be commercially driven."—[Official Report, First Scottish Standing Committee, 1 March 1990; c. 479]
The problem is that a decision that may make commercial sense for that commercially driven private company may not be a decision that makes industrial sense for the new town's local community. Livingston is one of the younger new towns and we have many green-field sites awaiting development. Indeed, the whole of Livingston is built on a green-field site. The existing development corporation, perfectly properly and responsibly, has

encouraged high-tech, high-skill, electronic companies on those green-field sites. Undoubtedly that gives us a strong, healthy economic base and that was the right decision to take.
If that development corporation had been a commercial company with development powers looking simply at how to maximise its rate of return on those green fields bang in the middle of Scotland's motorway hub, it would have developed warehousing and distribution facilities that would have maximised the returns, but provided the minimum number of jobs.
The Minister of State has constantly avoided facing the fundamental problem. It is clear from the White Paper that the Government's motivation in the Bill is to maximise the rate of return on the sale of the nev, towns' assets. It is impossible to read the White Paper without hearing cash registers ringing at the back of Ministers' minds. There is inevitably a conflict between maximising the return on the new towns' assets and protecting the economic future and basis of the people who live in those new towns.
The main issue of concern to my constituents and to the constituents of my hon. Friend who represents the other four Scottish new towns is, what will happen to the houses that people rent from the development corporations once the corporations are wound up? I read the debates in Committee about housing. In a spirit of compassion. I must tell the Minister of State that I felt sorry for him when I did that. Now, that is uncharacteristic of me and I promise my hon. Friends that I will try to conquer that uncharacteristic sentimental weakness. However, I have been part of delegations to the Minister, as have my other hon. Friends who represent the Scottish new towns, and we have discussed that matter.
I hope that I speak for some of my colleagues when I say that it is impossible not to be moved by the Minister's obvious discomfort when we discuss that matter. The Minister is impaled on a fork. Having used the language of tenants' choice for several years, he suddenly finds that the one choice that tenants want is the choice that he does not want to give them. That is the fundamental problem.
In Committee, the Minister of State referred to the fact that the percentage of people who expressed a preference for the district council was "barely 50 per cent." I challenge the Minister now to explain to this democratically elected House of Commons how "barely 50 per cent." differs from a clear majority. The two must surely be synonymous. The survey from which the Minister quoted shows that only 12 per cent. expressed an interest in any other landlord. Of those who want to remain tenants and expressed a preference, four out of five expressed a preference for the district council. I submit that it would be an outrage if they were denied that choice at wind-up.
I want to refer to the distress that the Minister faced in his speech today and also in Committee about the fact that quite a number of the new town residents want to purchase their houses and become owner-occupiers. It is not necessarily the case that even those who intend to buy have no interest in what happens to the rest of the housing stock. Over the past month, the clear majority of people in Livingston who have come to me for assistance with a housing problem and in desperate housing need were owner-occupiers facing dispossession and a forced sale either as a result of a marital split or because of redundancy.
The position of those people on wind-up threatens to be impossible. The statutory authority with a duty for homelessness in Livingston is West Lothian district council. As I understand the Minister, after wind-up that council may be stuck with that duty and responsibility, but without any housing to fulfil it. It will no longer have access to Livingston development corporation housing stock to discharge its responsibility.

Mr. Worthington: Is my hon. Friend aware of the position in East Kilbride, where tenants must pay £1 extra a week on their rents because of the low number of houses which the district council controls?

Mr. Cook: I am grateful to my hon. Friend for that information, which fortifies my case. I will strongly support new clause 2 because it entrenches the right of individual tenants—not on a majority ballot—to choose from a full range of options, including the district council.
It will not be enough for the Minister of State to respond to our anxieties by accepting the bolthole offered by his hon. Friend the Member for Wirral, South (Mr. Porter) that the district council option is not ruled out. The massive majority of the tenants have chosen the district council option. By the Minister's own admission, 50 per cent. chose the district council while only 12 per cent. chose any other landlord.
It is not enough to respond to that by saying that the Government have not ruled out the district council option. The Minister of State is asking Parliament to pass the Bill tonight. He cannot ask us to do that while he is saying that the Government retain an open mind about what they will do when the new powers have been enacted. He must tell the House what he intends to do with his powers. More important, he owes it to tenants to tell them what to do, because they want to know now, not three years hence.
If the Minister of State accepts that proposition, it will offer him a blessed release from the discomfort that has been caused by the position that he has been asked to defend. The Minister of State affects a style that has a certain gravitas. The position that he is being asked to defend threatens to undermine that rhetorical style. It is impossible for the Minister of State to speak with dignity when he is committed to saying that the Government are committed to tenants' choice but they have not yet made up their mind on whether they will let tenants choose the landlord they want. That position is a farce. It has neither gravitas nor dignity. The Minister should abandon it. If he does not, hon. Members should vote it down.

Mr. Henry McLeish: I am pleased to participate in the debate, and I warmly welcome the comments of my hon. Friend the Member for Livingston (Mr. Cook). From meetings with the Minister of State at Dover house and from our proceedings in Committee it is quite obvious that he suffers discomfort, partly because he must know that he cannot offer choice to the tenants of the five new towns when their major aspirations are security and an accountable landlord that will take care of their long-term interests. He clearly cannot be talking about choice if that major option is ruled out.
It is nearly 50 years since the New Towns Act 1946 came into being as one of the most significant regional

policy initiatives of the first post-war Labour Government. It is a tragedy that, in the next two or three years, that achievement will be turned into the implementation of this measure, which is a curious combination of ideology, incompetence, investment squandering, irrelevance and, more important when we discuss housing, insensitivity. The key issue is that the Government will not allow the tenants of Scotland's five new towns to exercise a judgment that will allow them, if they wish, to opt for the district council as a preferred landlord. Hon. Members have said that this matter is not political; it is technical, it is common sense and it is logical. If we want to maximise choice, we maximise options. However, the key has been excluded.
The reason why the Government languish in the polls is that they listen to no one about anything. The situation cannot be defended. Scots in new towns want a choice. The debate is a travesty. People in Scotland, including hon. Members from the five new towns, support the district council option, but one significant group have isolated themselves—Conservative Members. The Secretary of State, unlike the Under-Secretary of State, should surely want some avenues to try to improve his party's electoral prospects among one tenth of the population of Scotland. That is how many people will be affected by our decisions this evening.
I shall be charitable because my hon. Friend the Member for Livingston said that he had some feeling for the Minister of State's plight. Hansard will possibly record the silences. I invite the Minister to intervene and tell the Scots without equivocation why the Government will not allow tenants to select the district council in the winding-up period, if that is one option on offer to them. Will the Minister of State respond to that challenge so that we can have it on the official record that that is the Government's unequivocal position? I want to be charitable, so I shall ask again—

Mr. John McAllion: The Minister of State may be sleeping.

Mr. McLeish: My hon. Friend is suggesting that the Minister of State is nodding off.
The Government have no case. It is simply an exercise in politics, when we should be putting tenants' interests high on our political agenda.
If this were only political malice, it would be bad enough, but we have confusion as well. In Committee, in response to my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe), the Minister of State said:
If the hon. Lady will allow me to continue, I shall come to that.
The second important point to emerge from the report was that only 30 per cent. of tenants want to make a choice now; four fifths would prefer to choose at wind-up. That seems to be a more appropriate time at which to address the choice.
Later in the same debate, he said:
Had the hon. Gentleman been here at the beginning, he would have heard me say that there was no justification for transferring from one public authority to another. The role of Scottish Homes is to become the residual landlord of those houses that are not transferred elsewhere in the interim."—[Official Report, First Scottish Standing Committee, 6 March 1990, c. 518–31.]
The Government have not completely closed the door. In the process between now and the wind-up, district councils will not be an option and anything that is left will go to Scottish Homes. That defies logic—it cannot work. In the Minister of State's rantings, there is no prospect of the district council being a serious option in the run-up to


the wind-up or post wind-up. The Minister of State is deceiving the Scottish people on a scale previously not seen, even under the standards of the present Government. Why is that? The powerful combination of confusion and ideology will mean that tenants in Glenrothes and the other four new towns will look upon the Government and merely shrug their shoulders and say, "Fifteen per cent. in the opinion polls is probably far too generous."
Parliament's time can often be tragically wasted. This issue unites everyone in a common cause to provide choice to tenants who live in some of the most successful post-war public sector initiatives. I make a final appeal to the Minister of State. He should put aside his confusion, step back from ideology and do the things that matter to people. If Parliament is to mean anything, we should, as far as possible, reflect tenants' wishes and those of the five new town representatives who are closer to the public in Scotland than are the present Government, and certainly the Minister of State.

Mr. Mike Watson: There have been several high-standard contributions to the debate. In some respects one of the most interesting speeches was by the hon. Member for Wirral, South (Mr. Porter), who failed miserably to establish his Scottish credentials but none the less made some interesting comments on the proposals. It might have been useful if he had been a member of the Standing Committee. The Government had to pull in five hon. Members representing English constituencies, and the hon. Member for Wirral, South was not one of them. Perhaps now that we have heard his view, having looked at one of the aspects of the Bill in detail, it is obvious why he was not a member of the Committee. None the less, his comments were interesting and have been expanded in great detail and with great force by my hon. Friends who represent the new towns.
It is a matter of hypocrisy and double standards for the Minister of State and the Secretary of State to come to the House with proposals that are so restrictive of tenants' choice. Their double standards take two forms. First, they have championed choice. They have built many pieces of legislation on choice—choice for consumers, patients, parents and tenants in other aspects of their right to buy local authority houses. That choice is now being significantly narrowed, specifically to exclude the one choice that the majority of tenants have designated.
The second double standard was referred to by my hon. Friend the Member for Cunninghame, South (Mr. Lambie)—the different way in which legislation is framed for Scottish tenants and tenants south of the border. It is disgraceful that English tenants can still opt for their district councils when new towns are wound up, while that facility is not to be offered to Scots.
The Government should have learnt something from the painful lesson that emerged from the Budget statement last month, when different treatment between Scotland and England rebounded on them with force. Indeed, I have discovered in recent days that there is to be another double standard between Scotland and England, this time in relation to Scottish Enterprise and Highlands and Islands Enterprise and the way in which complaints relating to them are to be handled.
At present, the Training Agency has responsibility for dealing with complaints applying to training, and individuals can go to the Parliamentary Commissioner for Administration with their complaints. I hear that it is

being proposed through a back-door method—I say that because I have only seen a copy of a letter dealing with this matter—that that right should be removed and that it should not be possible for complaints to be referred to the commissioner under Scottish Enterprise, Highlands and Islands Enterprise or any of the local enterprise committees in Scotland.
In England and Wales, where the Training Agency continues to have responsibility for training, the Parliamentary Commissioner for Administration will still be able to deal with complaints which go through the agency.
The Government, including the Scottish Office, are treating Scotland in a second-class way, and that exemplifies the double standards that the Government are applying in this and other legislation. The people of Scotland will note this trend, as they will note the disgraceful restriction on tenants' choice that this measure proposes.

Mr. Sillars: We have listened with interest to the five excellent speeches that have been made by hon. Members who represent new towns in Scotland. Our main anxiety is about the Minister's statement that the final choice is not ruled out. It is not just that he has not ruled it in. Our fear is that in due course a Government spokesman will say, "We did not make any such promise. Nowhere can you find that promise in black and white." That is our major anxiety and it is disreputable for the Minister to use such weasel words as "We have not ruled it out."
Throughout the debate, the hon. Member for Wirral, South (Mr. Porter) has been the only English Member present. He entered the Chamber willing and happy to support the Government, but as he listened to the debate, he saw the logic, fairness and principle of our argument, and his speech was in support of the Opposition. Whether in due course his vote will follow his speech is a matter for him.
The point that the hon. Gentleman made will not be missed, because our proceedings are televised. The Government Benches have been empty for the debate, while a clear case on behalf of the tenants of Scottish new towns has been made by Opposition Members. In other words, the only English Tory who came to listen became convinced of the wisdom of our case. Tragically, when a Division takes place, all those English Tories who did not hear the argument will vote for the Government.

Mr. Lang: The debate has taken a predictable course. I suppose that I should be grateful for the sympathy offered by Opposition Members and their avowed conversion to the principle of choice and diversification in housing. I would express such a view if I found it remotely credible, but I have not forgotten how Opposition Members fought tooth and nail when we sought to introduce choice arid tenants' rights into Scottish housing. The Opposition are, as they have always been, believers in the municipalisation of housing and the ownership of housing by district councils, and they have always resisted private housing.

Mr. Norman Hogg: The Minister talks about tenants' choice. That worries me, because he is an authority on aggressive paternalism. If that is what he is giving us, he


should be careful about talking of choice and the right to buy in the context of new towns because those tenants always had the right to buy their houses.

Mr. Lang: I have yet to be persuaded that Labour Members have changed the policy attitude that they adopted when we came to office in 1979, which was to resist our proposals to introduce the right to buy for council house tenants. Opposition Members have spoken of large turn-outs at meetings and of concern and anxiety in new towns about our proposals for housing, and it is no wonder that there is that anxiety because Opposition Members are stirring up fears about the future. It is their statements which are raising those doubts. We want to see diversification in housing. We want more housing associations and other forms of rented tenure as well as more private ownership. That ties in with the wishes of tenants. Opposition protestations of a similar commitment to diversification carry no conviction with my hon. Friends and me.
Opposition Members still seek the option of district council transfer as a means to press that option alone. If that were to happen, tenants would lapse back into the old monopolistic straitjacket of a public sector landlord, and all our work in eliminating uniformity would have been to no avail.

Mr. Robin Cook: Leaving aside for a moment the Minister's suspicions about the Opposition's motivation, is he aware that one reason why it would be impossible to do as he alleges is the fact that district councils themselves are no longer seeking that course? A unanimous feature of the five districts representing new towns is their statement, "Leave it to the tenants to choose, but put us on the menu of choice."

Mr. Lang: My impression from all my meetings with SLANT, Scottish Local Authorities with New Towns—the hon. Member for Livingston (Mr. Cook) was present at those meetings—has been of that there is a substantial ambition that local district councils should take over that housing.

Mr. Ingram: rose——

Mr. Lang: I will not give way. I promise to deal later with the points that the hon. Gentleman made.

Mr. Norman Hogg: On a point of order, Mr. Speaker. I understood that we were engaged on what are described as the remaining stages of the Bill and that these proceedings are not time-limited. The Minister therefore has every opportunity to reply to our points. I assure him that we are prepared to sit here for as long as he is willing to address us.

Mr. Lang: I am anxious to reply to the points raised in the debate and I have before me a considerable number of notes.
The hon. Member for Clydebank and Milngavie (Mr. Worthington) said that all English new towns had the right to opt for the district council, and the hon. Member for Glasgow, Govan (Mr. Sillars) also seemed to favour the English solution to Scotland's problems—a course that he is not normally accustomed to follow.
In fact, English new towns do not have that right. The power in England was introduced in the Housing Act

1988, by which time only four remained out of the 19 corporations originally set up in England. Before that change, the Commission for the New Towns was the body available, as a residuary body, to take over housing. Scotland does not have a commission for new towns. We did not regard that as a desirable body to set up. We have Scottish Homes, and that body is available to take over corporation houses.
There is no comparable body in England. Had there been such a body, the approach adopted in England might have been different. I believe that Scottish Homes is a responsible landlord and will operate the same high standards as the corporations. It is still in its early days, and although it may be suffering from the fact that it is still an unknown quantity, I am confident that tenants need have no cause for concern about the future with Scottish Homes.

Mr. McLeish: Why will the Minister not allow the district council to become part of the menu offered to him by my hon. Friend the Member for Livingston (Mr. Cook)?

Mr. Lang: The hon. Gentleman should examine the booklet that we circulated to the new town local authorities, in which we made it clear that, among the options that we would consider at the appropriate time during wind-up, were housing associations, housing co-operatives, district councils and other landlords. In that booklet we also made it clear that, at the end of wind-up, the residuary body for houses which did not go to other destinations would be Scottish Homes.
The hon. Gentleman quoted me as saying that at this stage there was no sense in transferring from one public body to another, but at this stage in the process the Government—who in any case believe that there should be not an increase but a reduction in the amount of public housing—could achieve nothing by transferring housing from the development corporation to the district council. Towards the end of wind-up will be the time to consider the appropriate choice.

Mr. Barry Porter: I am genuinely puzzled. It seems that, during the wind-up period, the option to transfer to a district council does not exist, and that on wind-up those who have not transferred to something else will go to Scottish Homes. Scottish Homes may or may not be a wonderful thing, and district councils may or may not be dreadful things, but at what point do the tenants have the option of going to the appropriate place? I do not understand.

Mr. Lang: I was about to come to that. My hon. Friend asked me earlier to confirm that the option of transfer to the district council had not been ruled out, and I am happy to do so, but now is not the right moment at which to decide that that will be a firm option. We have made it clear that the options will be addressed and decided during wind-up, which will start in the first new towns—East Kilbride and Glenrothes—next year and run for a further three years. The winding up of the last of the five new towns—Irvine, in 1996—will not finish until just before the end of the century, by which time the hon. Member for Cunninghame, South (Mr. Lambie) will be a venerable individual. It would be wrong for us now to pre-empt the


option, to foreclose on the choices and to make decisions which might bear no relation to the housing circumstances prevailing at that time.

Mr. George Foulkes: Like the hon. Member for Wirral, South (Mr. Porter), I was not a member of the Standing Committee, and I am equally puzzled. No one today has urged the Government to take the course they are taking—that of ruling out the opportunity for tenants to choose a district council as their landlord. What bodies or individuals in Scotland have urged that course on the Government?

Mr. Lang: The Government do not form their policies in response to urgings from people—we prepare our policies and put them to the electorate. The electorate returned a Conservative Government at the last election. Obviously, people support the policies that we pursue, including our housing policies. We are pursuing a policy that we believe is right and ill the best interests of new town residents.

Mr. Foulkes: Will the Minister give way?

Mr. Lang: No, I have many other points to answer.
The hon. Member for Clydebank and Milngavie asserted that in England all the housing went to district councils, but that is not so—housing in Basildon is still managed by the Commission for the New Towns and in Runcorn the district council was not prepared to take on the housing, so the Government had to retrieve the situation there and ensure that the needs of tenants were met. In Scotland, Scottish Homes can continue to provide secure tenancies and a high quality of service for existing development corporation tenants.
The hon. Member for Clydebank and Milngavie talked of tenants' right to choose where they wished to live. Nothing in our proposals would affect in any way the rights of secure tenants to continue to live in the houses that they currently occupy. Sections 45 to 56 of the Housing (Scotland) Act 1987 govern security of tenure, and our proposals do not change those rights. If the hon. Gentleman is worried about those who are now without houses in the new towns—a perfectly legitimate concern—I should point out that we are responding by spending some £40 million on Scottish new town housing in 1991–92, including £17 million in East Kilbride where, I acknowledge, there are particular problems. More than 1,400 completions have taken place since I lifted the moratorium on general needs house building a couple of years ago, and 4,300 public and private sector houses are being built in the new towns.
The hon. Member for Fife, Central (Mr. McLeish) said that one tenth of Scottish people were affected by the Government's decision on new town housing. The hon. Gentleman's sums are somewhat out of kilter. The new towns accounted for 5 per cent. of the Scottish population, but for only 4·1 per cent. of the Scottish public sector tenanted stock as at the end of last year. Taking all Scottish housing stock together, fewer than 1·5 per cent. of the Scottish population are new town development corporation tenants, and that figure is falling every day as a further 11 houses per day are bought by sitting tenants.
Opposition Members have cited various figures culled from surveys in an attempt to prove an overwhelming demand among tenants to move to district councils from development corporations, but insofar as any demand is

evident, it is in the other direction. If we examine the number of applications from development corporation tenants to move to local district councils, we find that about 40 times as many district council tenants want to do the opposite. For example, in Irvine, three development corporation tenants have applied to go to Cunninghame district council, but 184 have applied to go in the opposite direction.

Mr. Worthington: If so few tenants want to go to the district council, why cannot that simply be agreed? If there are a great many, why cannot it be agreed as a democratic choice? Either way, the Minister is being awkward.

Mr. Lang: It can be agreed, but now is not the right time to make the decision. The time for that is when wind-up ends and the development corporations approach the point of dissolution.
From the surveys that have been carried out, it is evident that tenants want more information as they do not know what options are available to them or what they want to do. As one survey pointed out, only 30 per cent. of district council tenants want to make a choice now. Four fifths of development corporation tenants want to choose at wind-up, which is the right time to choose. Some 50 per cent. of people currently think that they would choose to move to district councils. That is not the ringing endorsement of district councils that the hon. Member for Livingston seems to think it, as some 38 per cent. of tenants—more than a third—say that they do not know what their choice would be, and if they made their choice now, fewer than one fifth would choose the district council.
The number one choice—to use the phrase of the hon. Member for Clydebank and Milngavie—is not the district council but home ownership. That is the strong trend emerging through the development corporations. Some 40 per cent. of existing tenants are interested in home ownership, two thirds are actively considering it and three quarters of the rest expect to consider it within the next five years. That is where the central thrust is in new town housing, and I believe that it is a desirable trend.

Mr. Ingram: Will the Minister come to my constituency? I will pay for a meeting and arrange for him to deliver that argument to the vast numbers of people who will turn up. Let him listen to what the residents of the new towns have to say. If they say what we are saying, will he then change his mind?

Mr. Lang: I hope to have many opportunities to visit East Kilbride again. Substantial economic success has been achieved there and I have visited both industrial and housing developments. There will be plenty of opportunities for me to assess, in various ways, the views of the residents.
The hon. Member for East Kilbride (Mr. Ingram) raised a number of points relating to new clause 8. The, wording is similar to the Government's, but it seeks to introduce a number of additional provisions, which we debated in Committee but which the hon. Gentleman seeks to re-air. The first proposal relates to an audit. An economic audit of the industrial assets of the towns takes place every year and is summarised regularly in the annual reports of the corporations. It would be a waste of resources, time and effort to repeat the exercise.
We want to carry out an environmental audit to identify those areas in the new towns which are non-productive and non-revenue-earning and which in due course will need to find a new owner. That does not need legislation—it is an administrative matter. East Kilbride and Glenrothes are preparing to proceed at an early stage.
As for making the findings available, I should like that to be done if possible. That would be worth while. However, commercial confidentiality may be involved in certain cases. To the extent that that could limit the availability of information, I am inhibited from giving an unqualified undertaking. However, as complete a version as possible of the report will be made available.
7 pm
As for local authority investment in local development companies, development corporations are not inhibited from investing in local development companies. Legislation is not needed. Why should the Government seek to compel development corporations or district councils to invest in local development companies? The Government ought to be neutral. However, there is no reason why those bodies should not seek to invest in local development companies. It might be in the interests of a local development company to seek that investment, but it is for the company to take that decision.
I take issue with several elements in the proposal that there should be consultation on disposals. The most important is the sheer impracticality of the proposal. Consultation would be required every time that a development corporation intended to dispose of some of its assets or liabilities. Under such an arrangement, everyone would become bogged down in the process of consultation and response. Even without wind-up, the development corporations are disposing of properties. We are contemplating an intensification of that process. However, I will consider whether the wind-up order might properly contain a provision for enhanced consultation.
I see no merit in transferring vacant houses to district councils. An appropriate part of the management of housing stock is to provide for a certain number of vacant houses to allow for modernisation and other factors. The development corporations have an excellent record on the efficient management of their housing stock. The average of empty properties is less than 2 per cent., compared with about 6 per cent. in district councils.
The hon. Member for Livingston referred to industrial promotion and to other aspects which he believed were contrary to the commercially driven momentum of local development companies. He was right to identify that aspect, but we have addressed the point. I referred to this in Committee when I made it clear that any local development company which succeeded in securing a contract to take over commercial assets and the opportunity further to develop them in new town areas would also be obliged to enter into a contract for a period of years with Scottish Enterprise to fulfil precisely those non-commercial roles which would be in the interests of the Scottish economy and of the new towns—such as industrial promotion, the provision of specific factory requirements for inward investment cases and the provision of commercially unattractive small industrial start-up workshops.
Far from seeking to maximise the return to the taxpayer, the Government's purpose is to maintain the existing momentum in the new towns. It would be easy to wind up the new towns and walk away leaving nothing, but we believe that the economic momentum and economic achievements of the new towns are such that we should seek to preserve that momentum and enhance it in the period ahead.
The Scottish new towns have been, and will continue to be, powerful engines of social and economic change. They have been an almost unqualified success story, and the changes that they have achieved are fundamental and lasting. Our economic policies are informed by justifiable pride in the maturity of the new towns and their ability to make their own way in the world. New problems and different economic challenges elsewhere should properly command our concern and commitment. The new clause is a necessary provision to ensure that the new towns can be wound up and that the future economic and social well-being of those areas is maintained. I commend the new clause to the House.

Question put, That the clause be read a Second time:——

The House divided: Ayes 141, Noes 81.

Division No. 182]
[7.04 pm


AYES


Alexander, Richard
Forth, Eric


Alison, Rt Hon Michael
Garel-Jones, Tristan


Amess, David
Gill, Christopher


Amos, Alan
Glyn, Dr Sir Alan


Arnold, Jacques (Gravesham)
Goodlad, Alastair


Ashby, David
Goodson-Wickes, Dr Charles


Atkins, Robert
Gorman, Mrs Teresa


Atkinson, David
Gow, Ian


Baker, Nicholas (Dorset N)
Green way, John (Ryedale)


Bellingham, Henry
Gregory, Conal


Bennett, Nicholas (Pembroke)
Hague, William


Boscawen, Hon Robert
Hamilton, Hon Archie (Epsom)


Boswell, Tim
Hamilton, Neil (Tatton)


Bowis, John
Harris, David


Brandon-Bravo, Martin
Hayhoe, Rt Hon Sir Barney


Brazier, Julian
Hayward, Robert


Brooke, Rt Hon Peter
Higgins, Rt Hon Terence L.


Browne, John (Winchester)
Howell, Ralph (North Norfolk)


Bruce, Ian (Dorset South)
Hughes, Robert G. (Harrow W)


Buck, Sir Antony
Hurd, Rt Hon Douglas


Burns, Simon
Irvine, Michael


Burl, Alistair
Jack, Michael


Butler, Chris
Key, Robert


Carlisle, John, (Luton N)
Kilfedder, James


Carlisle, Kenneth (Lincoln)
King, Roger (B'ham N'thfield)


Carrington, Matthew
Knapman, Roger


Cash, William
Knight, Dame Jill (Edgbaston)


Chapman, Sydney
Lang, Ian


Chope, Christopher
Lawrence, Ivan


Clark, Hon Alan (Plym'th S'n)
Leigh, Edward (Gainsbor'gh)


Clark, Dr Michael (Rochford)
Lester, Jim (Broxtowe)


Colvin, Michael
Lightbown, David


Coombs, Simon (Swindon)
Lilley, Peter


Cope, Rt Hon John
Lloyd, Peter (Fareham)


Cran, James
Lord, Michael


Davis, David (Boothferry)
Luce, Rt Hon Richard


Dorrell, Stephen
Lyell, Rt Hon Sir Nicholas


Douglas-Hamilton, Lord James
MacKay, Andrew (E Berkshire)


Dunn, Bob
Maclean, David


Durant, Tony
McNair-Wilson, Sir Michael


Emery, Sir Peter
Mans, Keith


Evennett, David
Marland, Paul


Fallon, Michael
Marshall, Michael (Arundel)


Favell, Tony
Martin, David (Portsmouth S)


Fenner, Dame Peggy
Mitchell, Andrew (Gedling)


Finsberg, Sir Geoffrey
Monro, Sir Hector


Fookes, Dame Janet
Morrison, Sir Charles






Moss, Malcolm
Steen, Anthony


Neubert, Michael
Stern, Michael


Nicholson, David (Taunton)
Stevens, Lewis


Norris, Steve
Stewart, Andy (Sherwood)


Onslow, Rt Hon Cranley
Stradling Thomas, Sir John


Oppenheim, Phillip
Summerson, Hugo


Page, Richard
Taylor, Teddy (S'end E)


Paice, James
Thompson, D. (Calder Valley)


Patten, Rt Hon Chris (Bath)
Thompson, Patrick (Norwich N)


Pawsey, James
Thorne, Neil


Porter, David (Waveney)
Twinn, Dr Ian


Raffan, Keith
Wakeham, Rt Hon John


Redwood, John
Walker, Bill (T'side North)


Renton, Rt Hon Tim
Waller, Gary


Riddick, Graham
Wardle, Charles (Bexhill)


Rifkind, Rt Hon Malcolm
Watts, John


Sackville, Hon Tom
Wheeler, Sir John


Shaw, David (Dover)
Widdecombe, Ann


Shaw, Sir Michael (Scarb')
Wood, Timothy


Shelton, Sir William
Yeo, Tim


Sims, Roger
Young, Sir George (Acton)


Smith, Tim (Beaconsfield)



Speed, Keith
Tellers for the Ayes:


Spicer, Michael (S Worcs)
Mr. John M. Taylor and Mr. Irvine Patnick.


Squire, Robin



Stanbrook, Ivor





NOES


Allen, Graham
Lambie, David


Anderson, Donald
Lloyd, Tony (Stretford)


Archer, Rt Hon Peter
McAllion, John


Beckett, Margaret
McAvoy, Thomas


Beith, A. J.
McCartney, Ian


Bennett, A. F. (D'nt'n &amp; R'dish)
McFall, John


Bermingham, Gerald
McKay, Allen (Barnsley West)


Bidwell, Sydney
McLeish, Henry


Boateng, Paul
Maclennan, Robert


Bruce, Malcolm (Gordon)
Madden, Max


Carlile, Alex (Mont'g)
Michie, Mrs Ray (Arg'l &amp; Bute)


Clay, Bob
Moonie, Dr Lewis


Cook, Frank (Stockton N)
Morgan, Rhodri


Cook, Robin (Livingston)
Morley, Elliot


Cryer, Bob
Morris, Rt Hon A. (W'shawe)


Cummings, John
Morris, Rt Hon J. (Aberavon)


Dalyell, Tarn
Murphy, Paul


Dixon, Don
Nellist, Dave


Dobson, Frank
Patchett, Terry


Doran, Frank
Pike, Peter L.


Dunnachie, Jimmy
Powell, Ray (Ogmore)


Dun woody, Hon Mrs Gwyneth
Quin, Ms Joyce


Field, Frank (Birkenhead)
Reid, Dr John


Fields, Terry (L'pool B G'n)
Robertson, George


Flynn, Paul
Ross, Ernie (Dundee W)


Foster, Derek
Ruddock, Joan


Foulkes, George
Salmond, Alex


Galloway, George
Sillars, Jim


Godman, Dr Norman A.
Skinner, Dennis


Golding, Mrs Llin
Spearing, Nigel


Gordon, Mildred
Watson, Mike (Glasgow, C)


Griffiths, Nigel (Edinburgh S)
Welsh, Michael (Doncaster N)


Griffiths, Win (Bridgend)
Williams, Rt Hon Alan


Heal, Mrs Sylvia
Williams, Alan W. (Carm'then)


Henderson, Doug
Wilson, Brian


Hogg, N. (C'nauld &amp; Kilsyth)
Winnick, David


Home Robertson, John
Wise, Mrs Audrey


Hughes, Robert (Aberdeen N)
Worthington, Tony


Illsley, Eric



Ingram, Adam
Tellers for the Noes:


Janner, Greville
Mr. Frank Haynes and Mr. Martyn Jones.


Kennedy, Charles



Kirkwood, Archy

Question accordingly agreed to.

Clause read a Second time, and added to the Bill.

New clause 10

ENCOURAGEMENT OF WOMEN, MEMBERS OF MINORITY
RADICAL GROUPS AND DISABLED PERSONS TO TAKE
ADVANTAGE OF OPPORTUNITIES FOR CERTAIN WORK
ETC.

Without prejudice to paragraph (a) of section 2(4) of this Act or to any enactment prohibiting discrimination (within the meaning of the Sex Discrimination Act 1975 or the Race Relations Act 1976), Scottish Enterprise and Highlands and Islands Enterprise shall each, in exercising its functions, promote—

(a) such actings by any employer as are lawful by virtue of section 48(1) of the said Act of 1975 (facilities for women only or for men only to train for, and encouragement for them to take up, work not ordinarily done for the employer by persons of the sex in question etc.) or 38(1) of the said Act of 1976 (corresponding facilities and encouragement in relation to members of particular racial groups); and

(b) actings by any employer—

(i) to afford access to facilities for training for disabled persons which would help to fit them for particular work in his employment; or
(ii) to encourage disabled persons to take advantage of opportunities for doing such work.'—[Mr. Lang.]

Brought up, and read the First time.

Mr. Lang: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to consider Government amendments Nos. 1 to 4, 15, 22, 23 and 27.

Mr. Lang: In Committee, we considered amendments to give Scottish Enterprise and Highlands and Islands Enterprise a role in developing employment opportunities for women, the disabled and ethnic minorities, and I said then that there were technical problems with the amendments. In particular, the wording risked infringing the Sex Discrimination Act 1975 and the Race Relations Act 1976. I also said that I was wholly in sympathy with the sentiments underlying the amendments.
The promotion of equal opportunities is a firm plank of Government policy, and our commercial prosperity will increasingly depend on unlocking the potential skills of all groups in society. I am happy to commend the new clause, which we propose to insert between clause 15 and clause 16. It will oblige Scottish Enterprise and Highlands and Islands Enterprise to promote positive action by employers to increase employment and training opportunities for women—and, indeed, for men—for the disabled and for racial minorities in occupations in which such groups are under-represented.
The new clause may seem complicated, but it is important to ensure——

Dr. Norman A. Godman: As one who unequivocally supports the need to have the concerns of women and others in training and employment at the forefront of the Bill, I point out to the Minister that the board of the Renfrew enterprise company has no woman among its 18 members. I hope that the hon.


Gentleman will join me in voicing regret over the total omission of women from such a board. Is that likely to be the case for other such companies?

Mr. Lang: It is a matter for each local enterprise company to decide who will constitute its board. I should like to see them choose women, but those women must be chosen on merit and not as a tokenist approach. We are responsible for appointing the directors of Scottish Enterprise and Highlands and Islands Enterprise, and I am happy to be able to point out to the hon. Gentleman that there are three women on the board of Scottish Enterprise. I believe—I will correct this later if I am wrong—that there are two women on the board of Highlands and Islands Enterprise. Therefore, as far as it is within our power to make such appointments, we have demonstrated our commitment fairly substantially. I share the hon. Gentleman's wish to see more women coming forward to such public positions, and perhaps local enterprise companies will find suitable opportunities for them to do just that.
The new clause will oblige Scottish Enterprise and Highlands and Islands Enterprise to promote positive action by employers to increase employment and training opportunities for women—and men—the disabled and members of racial minorities in occupations in which such groups are under-represented. It is important to ensure that the clause does not detract from the provisions against discrimination in employment and training in the Sex Discrimination and Race Relations Acts. The new clause builds on those provisions, giving Scottish Enterprise and Highlands and Islands enterprise a duty to promote positive action by employers when exercising their functions.
Amendments Nos. 1 and 3 are technical amendments, consequential on new clause 10 and, in the case of amendment No. 3, on amendment No. 4.
Amendment No. 4 deals with a matter that we discussed in Committee. There, an amendment was tabled to extend the role of Scottish Enterprise and Highlands and Islands Enterprise—carried forward from the Training Agency—in encouraging increases in training opportunities for women, girls and the disabled to ethnic minorities. I put on record then my agreement with what was intended. Existing race relations legislation, of course, makes it illegal to discriminate against racial minorities in such matters. This amendment goes beyond prohibiting discrimination to empowering Scottish Enterprise and Highlands and Islands Enterprise to take positive action. There was some difficulty with the original amendment proposed in Committee because the use of the term "ethnic minorities" does not tie in with existing race relations legislation. The present amendment gets round this by referring directly to the Race Relations Act 1976.
I turn now to amendment No. 15. It is at present unlawful for the Training Agency to discriminate on grounds of sex or race in exercising its functions. It is clearly right that, once the Training Agency in Scotland is subsumed within Scottish Enterprise and Highlands and Islands Enterprise, sexual or racial discrimination in the exercise of their training functions should also be unlawful, on the same basis. That is what the present

clause 16 sought to achieve by reference to provisions in the Sex Discrimination Act 1975 and the Race Relations Act 1976.
But there are technical problems with the rest of the clause as it stands. I am advised that it does not bring Scottish Enterprise and Highlands and Islands Enterprise within the ambit of all the relevant provisions in the 1975 and 1976 Acts. It has also been overtaken by amendments to the 1975 and 1976 Acts made by the Employment Act 1989. The present amendment therefore gets round those problems by simply inserting references to Scottish Enterprise and Highlands and Islands Enterprise in the 1975 and 1976 Acts. Therefore, I hope that the amendment will be acceptable to the House.
Amendment No. 2 relates to women and girls and to disabled persons, and makes it clear that the provisions of clause 2 include all types of training. Clause 2(4)(a) empowers Scottish Enterprise and Highlands and Islands Enterprise to encourage increases in the opportunities for training that are available for women, girls and the disabled. In Committee, Opposition Members suggested the addition of the words "at all skill levels". As they will recall, we saw some technical problems with that amendment. It might have been taken to imply that, if any training opportunities were encouraged, it had to be done at all levels, but, as hon. Members who served on the Committee will recall, I was happy to take on board the spirit of the amendment.
It is certainly desirable that not just the quantity but also the range of training for women and the disabled should be developed wherever practicable. We have also tabled an amendment to extend this provision to ethnic minorities. Indeed, we expect Scottish Enterprise and Highlands and Islands Enterprise to act as catalysts in developing training opportunities for all sections of the community, but I recognise the necessity to pay particular attention to the needs of women, the disabled and racial minorities.
It it already implicit in the clause that training may be at a variety of levels. All that is required is a clarification, and that is what the amendment is designed to do. It makes it clear that arrangements may include all types of training.
Amendment No. 22 arises from points made in Committee by the hon. Member for Glasgow, Maryhill (Mrs. Fyfe), who is unfortunately not in her place. In response to an amendment that she moved, I undertook to bring forward amendments requiring the Secretary of State to have regard to the principle that equality of opportunity should be promoted as between men and women, in making appointments to the boards of Scottish Enterprise and Highlands and Islands Enterprise. Amendments Nos. 22 and 23 fulfil that undertaking.
At the time, the hon. Lady said:
Since I came to the House … I have heard various employment Ministers reiterate their commitment to equal opportunities, but that never seems to result in action. … We still await the day when the Government will act all by themselves, without needing to be spured into action by someone else."—[Official Report, First Scottish Standing Committee, 1 February 1990; c. 178.]
It is sad that the hon. Member for Maryhill is not in her place now because she pressed these matters in Committee effectively and articulately. When she reads the report of our proceedings in Hansard, I hope that she will agree that, in advance of tabling this amendment, we have


demonstrably had regard to that principle in making our appointments to the designate boards of Scottish Enterprise and Highlands and Islands Enterprise.
The Scottish Development Agency at present has only one female member—I believe that she is the first it has ever had. As I said in reply to the hon. Member for Greenock and Port Glasgow (Dr. Godman) a moment ago, three of the 10 ordinary board members of Scottish Enterprise will be women, as will two of the 10 of Highlands and Islands Enterprise. There cannot be any suggestion of tokenism in those appointments. Those women have all been appointed for their personal qualities and track record and for the individual contributions that they can make. They are unquestionably there on merit. I hope that that will be reflected in the appreciation of Opposition Members for what I believe is a sensible move.
Amendment No. 23 is consequential, relating to amendment No. 22.
I turn now to amendment No. 27. We have been keen to remove barriers facing parents who want to return to work, or to take up training before returning to work. In the Budget, we announced tax relief on the assessed value of workplace nursery places. Within employment training, we make available a special allowance of up to £50 a week for child care to lone parents. In that connection, we took a power in the Employment Act 1989 to exempt discrimination in favour of lone parents in connection with training from the restrictions of the Sex Discrimination Act 1975.
The precise wording of section 8(1) in the 1989 Act refers to training arrangements under section 2 of the Employment and Training Act 1973 or to any training otherwise provided. Of course, training by Scottish Enterprise and Highlands and Islands Enterprise could count as training otherwise provided, but I think it best to put the matter beyond doubt by inserting in the 1989 Act a specific reference to training arrangements by Scottish Enterprise and Highlands and Islands Enterprise. I am sure that that will meet with approval on all sides, and I commend the amendment to the House.
The amendments are not controversial and do not change anything in previous legislation in any policy sense. However, they heighten the importance of avoiding discrimination whether on the grounds of sex, race, ethnic origin or disability. The amendments will improve the Bill. I am grateful to the Opposition Members who contributed to the debate that resulted in these amendments, which I commend to the House.

Mr. Worthington: I wonder whether the Minister has noticed how much more comfortable it was to talk sense instead of what we heard in the previous debate. I am sure that he found it comfortable to make his second speech, and I hope that that will encourage him to speak in such a vein more often.
We made suggestions along these lines in Committee. As the Minister has said, a lot of the work on this was carried out by my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe). We very much welcome what the Government have done and their proposals. Those who represent ethnic minorities in the Glasgow area have conveyed to me their pleasure at such a specific reference.
The importance of new clause 10 is that it will give women, disabled people and members of the ethnic minorities the levers that might be necessary in the future if at any time they feel that Scottish Enterprise and

Highlands and Islands Enterprise or—let us not forget about this—the local enterprise companies are not doing enough in that respect. The united wish of the House that action should be taken on that will now be enshrined in legislation. Therefore, we welcome the provisions.

Mr. Foulkes: I understand why my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) will welcome equal opportunities for ethnic minorities in Glasgow and its district. However, the specific point that I want to make relates to training opportunities for the mentally handicapped.
A week ago last Tuesday, I had an opportunity to visit Seabank and Henrietta street in Girvan, one of the Quarriers homes. I was greatly impressed by the work being done there, as I am by the work done by the Quarriers homes throughout Scotland, and the way in which they are adapting to different challenges. The home is responsible for providing accommodation and other help for a relatively small number of mentally handicapped adults.
7.30 pm
The people at the home raised with me the question of the length of training, in particular, in Maytag, the Maybole enterprise training scheme, which is now developing and expanding to Girvan, on which there have been mentally handicapped people. They find that the training opportunities for the mildly mentally handicapped are useful, but with one reservation. They feel strongly that, in order that mildly mentally handicapped people, often slow learners, may benefit fully from the training opportunities available, they should attend the course for two years rather than just the one to which they are limited under the current regulations.
I have written to the Secretary of State for Scotland—I expect that my letter will find its way to the Minister's desk, as these things do—urging him to consider changing the current regulations to allow mildly mentally handicapped people to go on the course for two years so that it should be as valuable to them as it is to other people in a year.
I had hoped that the amendments would allow some flexibility to enable training organisations such as Maytag to keep such trainees for two years rather than one, but at the end of his speech the Minister said that none of the amendments changed the structure of training, and that is slightly disturbing. If the Minister replies, I hope that he will say that there is some flexibility so that once the amendments are accepted Scottish Enterprise or local enterprise companies will be able to allow organisations such as Maytag some flexibility in the training of mentally handicapped people. If, after completing a course, such people are to compete on reasonably even terms with the rest of society, they should be able to go on the courses for two years.
I told the representatives of the Quarriers Home and some of its residents that I would press their case with the Minister, and I am glad to have the opportunity to do so on the Floor of the House. I hope that the Minister will be able to say that there will be flexibility in the schemes to allow for that need and that they will not be as rigid as at present.

Dr. Godman: I want briefly to echo the plea made by my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) about the training needs of those


with mental handicaps. The Minister will recall that, in Scottish questions a couple of weeks ago, I asked him about the sheltered employment scheme which has found sheltered workplaces for some 350 people. In his reply, the Minister spoke warmly of that scheme.
I pointed out that, in Strathclyde region alone, between 14,000 and 15,000 people are, sadly, offlicted with mental handicaps to a lesser or greater extent. My hon. Friend made a sound plea when he asked that the special needs of such people should be taken into account where training provision, within the parameters of the Bill, must be given special attention. He is right to say that those with mental handicaps require systematic training, which, by its very nature, needs to be much more extensive than training given to people without handicaps. Given the number of people in Scotland who are handicapped, it is essential that they be found training places and employment. The sheltered employment scheme can only be a part of the employment opportunities offered to some people.
All the work of industrial psychologists in that area and those working in ergonomics shows that, with the right kind of training, mentally handicapped people can perform functions as adequately as those who are not handicapped. It is the quality of the training and the trainers that is important.
I am pleased to see that lone parents are to be given financial assistance for child care provision when they undertake training, but what of a couple with small children who are suffering unemployment? Do the Government intend to give the same assistance offered to lone parents to couples with immature children?

Mr. Lang: The final point raised by the hon. Member for Greenock and Port Glasgow (Dr. Godman) would probably be more appropriately addressed to my right hon. Friend the Secretary of State for Social Security, and I shall make sure that the matter is drawn to his attention.
It is encouraging that, in such difficult and sensitive matters, there is a degree of agreement across the House on how we approach them. For example, the general approach as embodied in our "Care in the Community" proposals, although we may disagree on some aspects, has gained acceptance on both sides of the House and it embodies the recognition of the need for a new and sensitive approach to the problems of those with disabilities and handicaps, whether mental or physical.
I am grateful to the hon. Member for Clydebank and Milngavie (Mr. Worthington) for his welcome for the amendments. I have not yet seen the letter from the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), but no doubt I shall in due course and I shall reply to it. It is hard to generalise on the right period of training for mentally handicapped people, because the degree of handicap varies. I note that he was primarily concerned on behalf of Maytag, with its reservations about the mildly mentally handicapped, the need for flexibility and the possible extension of training facilities from one year to two.
We have made provision for greater flexibility for employment training which might go some way to cover that point. There are, as the House will know, some central guarantees on which the Government insist for the provision of training schemes. In the case of employment training, one of the requirements is that training should be

open to everyone who has been unemployed for a certain period, with a guaranteed place for those aged between 18 and 25 who have been unemployed for between six and 12 months.
We require that all training will enhance the job prospects of those taking part. We need a guarantee on minimum nationally set levels of training allowance, and we need a guaranteed acceptance of health and safety and equal opportunity standards. But that apart, there is flexibility. Not only do we allow for flexibility but we are keen to see it and we emphasise the importance of it in the kind of training places on offer, in the length and context of training, and in the payments to providers of training.
I hope that the needs of the mentally handicapped will not be overlooked as the new Scottish Enterprise proposals come into being. As clause 2(3) emphasises:
Scottish Enterprise and Highlands and Islands Enterprise shall each, to such extent as it considers appropriate, make arrangements for the purpose of—assisting persons to train".
Clause 2(4)(a) refers to
"arrangements for encouraging increases in the opportunities for training that are available to women and girls or to disabled persons".
This important sector is receiving increasing attention in Government and in the wider community, and I am sure that the new clause will enhance the chances of further recognition of it.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 11

MONITORING OF TRAINING FOR EMPLOYMENT

'Where the functions of Scottish Enterprise, or of Highlands and Islands Enterprise, mentioned in section 2(3)(a) or (b) of this Act are carried out through an agent or are delegated to any person, the body in question shall have the duty (which shall not itself be delegated) of keeping under continuous review the suitability and adequacy of any training provided by that agent, or as the case may be by that person (or his agent) in discharging those functions.'.—[Mr. Lang.]

Brought up, and read the First time.

Mr. Lang: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to take new clause 4—Training Inspectorate—
'Scottish Enterprise and Highlands and Islands Enterprise shall together establish and fund an inspectorate, and shall place at its disposal the services of such officers or servants as each body considers appropriate, with the duty of monitoring the quality of the training and the efficacy of the arrangements made under section 2(3) of this Act.'.

Mr. Lang: The Government have consistently demonstrated their determination to maintain and improve training quality, and this new clause is concerned with that. We have introduced the approved training organisation concept, and rapidly implemented it, first for youth training and in its turn for employment training.

Mr. Worthington: Will the Minister give way?

Mr. Lang: I have said nothing controversial yet, but I shall give way.

Mr. Worthington: How many approved training organisations are there in Scotland?

Mr. Lang: I shall give the figure in my winding-up speech.
In awarding approved training organisation status, and in monitoring it thereafter, the Training Agency verifies that the training provider meets comprehensive quality standards, covering assessment procedures, calibre of training, design and delivery, quality of management and staff, adherence to equal opportunities and health and safety requirements, and financial viability. In addition, the training standards advisory service provides an independent advisory service that has as its main role to assess the overall quality of training provision and to undertake evaluations of individual projects.

Mr. Worthington: Will the Minister confirm that there are six people in that unit?

Mr. Lang: Yes, I will confirm that, and that is a sufficient number of people to carry out the work efficiently and effectively.
We have repeatedly made clear our commitment to ensuring that training quality will continue to be a key consideration once the new bodies of Scottish Enterprise and Highlands and Islands Enterprise come into being. New clause 11 makes this explicit. It expressly places a duty on Scottish Enterprise and on Highlands and Islands Enterprise to monitor training quality wherever that training is provided by a local enterprise company or, as is expected invariably to be the case, by training providers subcontracting with the local enterprise company. For self-evident reasons, this duty to monitor is not in itself to be delegated, and amendments Nos 16 and 17 to clause 17 are consequentially needed.
No such provision was included in the Bill as originally drafted, for the simple reason that no specific provision of this kind has been thought necessary heretofore to empower the monitoring of training quality. The training standards advisory service operates under the general terms of section 2 of the Employment and Training Act 1973, as amended. The equivalent provision in this Bill is in clause 2. I have been convinced that training quality is so important and so central to what we are seeking to achieve through the Scottish Enterprise initiative that it is desirable on policy grounds to make specific reference to it in statute.
I recognise that new clause 4 is similar in its intention. Had it been possible, I should have been happy to support it, as I have no significant difficulty with it in policy terms. However, it is technically defective, so I have judged it best to table a version that avoids such technical difficulties. In the circumstances, I hope that the hon. Member for Clydebank and Milngavie will be content not to press new clause 4 but will support new clause 11.

Mr. Worthington: I listened to the Minister with great interest, but what he said about his new clause was not congruent with my reading of it. I hope that he will take up that point. New clause 11 says:
Where the functions of Scottish Enterprise or of Highlands and Islands Enterprise … are carried out through an agent or are delegated to any person, the body in question"—
which I have interpreted as meaning the local enterprise company—would be responsible for monitoring the quality of the training. That is just good management by that company. We are proposing an independent body to monitor and supervise the quality and performance of the local enterprise company. It is not adequate to ask the

local enterprise company to monitor its own performance, and that would not meet our point, as it would be part of the contract that such companies are likely to have with Scottish Enterprise or Highlands and Islands Enterprise.
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I can go further than that. The new clause is unattractive because there is a hand-washing element to it. It says that it is solely the reponsibility of the local enterprise company to monitor the quality of training rather than that it is the responsibility of Scottish Enterprise or Highlands and Islands Enterprise. The Government are washing their hands of training and are stepping back from it, expecting it to be done by other bodies. Public control of training, already limited, will decrease.
Our new clause would set up a training inspectorate because we are concerned about quality. That concern has arisen because of the Government's performance with their current schemes, a performance that has repeatedly given rise to public concern. The Government are changing the arrangements, but the direction of that change gives us cause for further concern, as an independent commercially driven body—the local enterprise company—will be responsible for training. The Department of Employment has run training in an appalling way. I speak about the Department of Employment because that training was, as it will continue to be, instigated by the Department. In Committee and on Second Reading, the pretence that there is Scottish Office control was simply deceitful.

Dr. Godman: Will the training inspectorate, as outlined in the new clause, not only assess the quality and efficacy of training programmes undertaken within local enterprise companies but have an advisory role? Will the people in the inspectorate have sufficient skills and knowledge to advise the local enterprise companies of the training that should be carried out in their areas?

Mr. Worthington: Our new clause is not ideal. Part of the problem is that, if we wanted to set up a genuinely independent inspectorate, outside the two enterprise bodies, such a move would be outside the scope of the Bill. To stay in order, we have tabled a new clause setting up a body that is inadequately independent but is the best possible within the terms of the Bill.
We are concerned that training is to go under the wing of local enterprise companies and will disappear from public view. On Second Reading, I described the situation as the laundering of public money. Money will come from the public and will be spent by private concerns. There is widespread anxiety that trainers whose central motivation is profit will be attracted into the field. There is a straight correlation, because the more that one spends on training, the less profit will go to the company. Therefore, there has to be some check, and at the moment the Training Agency does not achieve a good level of scrutiny. The Minister seems to be sanguine that there are six people to monitor quality throughout Scotland. That is simply not adequate.
I look forward with great interest to learning how many approved training organisations now exist in Scotland. When I last asked, I was told that we had hardly reached the first stage—setting up such organisations. It is not even as if training will be under the control of the Scottish Office, or under the control of a public body in Scotland, as we were promised. Control remains with the


Department of Employment, and nothing emphasised that fact more than the recently proposed initiative on training credits.
I think that it was on a Tuesday that the Department of Employment announced, with a great fanfare, the 10 pilot schemes for training credits that were to be introduced throughout Britain. If there was Scottish control of training, why should Scotland not have as many training credit schemes as it wants to experiment with? It cannot be because of the cost as the expense of introducing the training credit scheme throughout Britain for 1990–92 is only £12 million, and this year the Government are cutting £28 million from the Scottish budget.

Mr. McLeish: At least.

Mr. Worthington: As my hon. Friend says, we have been able to identify at least £28 million so far, but more may be revealed.
Why should Scotland not have as many training credit schemes as it wants? These schemes were initiated to an English and Welsh timetable, which is strange. Organisations that do not yet exist—local enterprise companies—have to put in a bid for a training credit scheme by 4 May. How can a body which has only just been approved for development money put in a bid by 4 May for a training scheme? I do not know. However, that is the timetable that has been sat down, and it is the same in Scotland as in England and Wales. Outline bids have to go to the Scottish Office by 4 May from bodies that do not exist. Detailed bids have to be submitted by the end of July. Who will submit those detailed bids?

Mr. McLeish: Does my hon. Friend agree that the timetable for credits is consistent with the chaotic timetable for the renegotiation of employment training contracts? Should we be surprised about the incompetence of the Government in Scotland?

Mr. Worthington: My hon. Friend should not spoil the second part of my speech, in which I shall come to the gross incompetence involved in the renegotiation of contracts.
Detailed bids have to be submitted by the end of July. Discussions have to take place between non-existent bodies and the local authorities about career schemes. I do not know how that will be done. I have no doubt that schemes will go forward in the names of certain organisations, but there cannot be much honesty involved.
When one asks the Scottish Office whether there will be a scheme—any scheme—in Scotland, they cannot say, "Yes, there will." We know that there will be such a scheme because the Department of Employment will decide that it had better keep the Jocks quiet, so a scheme will be allocated to Scotland on the grounds of expediency and not quality. Something will be cobbled together.
The Department of Employment is remote from Scotland and dominated by a south of England representative. We know that the employment training scheme would never have been devised by a political party in Scotland because it does not meet Scottish requirements. However, training will continue to be run by the Department of Employment, and the Training Agency has an appalling record of mismanagement.
In Committee, the Minister sought desperately to mislead us about the new flexibility open to local enterprise companies for employment training. He tried to make it sound as if it was a Scottish initiative, but it was clear to everyone in Committee that he was announcing the flexibility that is being introduced into the employment training scheme throughout the United Kingdom. I leave it to the Minister to demonstrate that there is any flexibility which applies particularly to the scheme in Scotland, and any Scottish aspect of youth training or employment training that is distinct from training in the rest of the United Kingdom. [Interruption.] I have had to wait for an answer to that question since 9 January. I am still waiting.

Mr. Bill Walker: I hope that the hon. Gentleman is aware that I have been interested in training and development throughout my life. For many years, the Royal Air Force paid me as one of its inspectors. I am curious to know what particular Scottish dimension in training seems likely to be missing from any scheme that applies throughout the United Kingdom.

Mr. Worthington: In simple terms, training the people without jobs for the jobs without workers is a south-of-England expression. In places where there are no jobs or where unemployment levels are about 20 per cent.—what the Minister calls a small patch in Glasgow—the scheme is inappropriate because it is geared for a different situation. When unemployment levels are 2 or 3 per cent., as they are in many parts of south-east England, one scheme may be suitable. In areas such as Springburn and Easterhouse in Glasgow, where male unemployment is between 30 and 40 per cent., one needs to devise another scheme.

Mr. Walker: rose——

Mr. Worthington: I have answered the hon. Gentleman's question fully, and I would prefer him to make his own speech in his own way later.
Evidence to show why we need an inspectorate has emerged in the past month and my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) referred to that a few moments ago.
Training managers and agents have been treated appallingly by the Department of Employment. At the end of March—this was brought to my attention on 30 March—the Department of Employment sent a letter to training managers and agents informing them that their contracts, which were due to run until September, were cancelled and would run only until the end of April. At the beginning of April, when people came into the office on a Monday, they were told that their contracts would run for only another month.
We are talking about hundreds of trainers and thousands of trainees whose lives were wrapped up in the employment training scheme. They found that the plans they made had been totally disrupted, not because of a particular Scottish problem, but for some reason that has not yet emerged because of problems in the Department of Employment. How can one run a quality training scheme in such circumstances?
It happened in the past with the Manpower Services Commission and the Training Commission and when we changed from the community programme to employment training. The whole system is dug up by the roots and thrown up in the air and it is hoped that something will


grow from it. After all the years of the Manpower Services Commission, we still have schemes rather than a structured training system. The end of the letter said:
the Training Agency will be contacting you"—
that is, the training managers and the training agents—"
urgently to discuss the recontracting process.
To the best of my knowledge, the Training Agency has not yet made contact with any agency or manager throughout Scotland.
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After 10 days, I became so concerned about the threat to training that I telephoned the head of the Training Agency in Scotland, Mr. Lex Gold, and said, "Are you aware that there has been no contact between the Training Agency and any of the training managers or training agents within Scotland?" He replied, "Who told you that?" I said, "My contacts are in the west of Scotland," and he replied, "Do you mean to say that the west of Scotland has not started yet?" The man who is in control of the training system within Scotland had no idea about what was happening in the west of Scotland. After speaking to him. I found out what was happening in the east of Scotland and it was the same—nothing.
I asked him, "How will you implement these cuts?" That is what it is about. The letter states:
We shall be taking the opportunity of contract renegotiation to review and agree with providers current payments, the numbers of contracted places and current arrangements for filling more places than specified in contracts. The overall aim will be to reduce unit costs.
How on earth will that be implemented without any guidelines from the Training Agency as to how the costs will be renegotiated? What are to be the future unit costs for places within Scotland?
In a parliamentary question which was answered on 24 April, I asked
what was the public expenditure per trainee on employment training in 1989–90
and I was told that it was £104 per trainee. I also asked for the figures for 1990–91 and was told:
Regional ET plans for 1990–91 are for internal management information purposes only."—[Official Report, 24 April 1990; Vol. 171, c. 167.]
The Department would not tell me. Public money is being invested in training, yet the Government have become so arrogant, withdrawn and unconcerned that they do not think that a Member of Parliament has the right to know what will be spent per trainee in Scotland. It is a crazy, appalling way of running training to send out a letter saying that all contracts are abandoned. I am now told that training agents and managers have received another letter telling them that their contracts are extended until the end of May.
That is exactly why we need a quality inspectorate. We are dealing with the training of young people, as youth training is also being renegotiated. We need a training inspectorate, not to tell the bodies that are administering training that they are responsible for monitoring the quality of training—which is what new clause 11 says—but an independent body to scrutinise the quality of training. No Government dedicated to quality would send out such a letter. It would be a contradiction in terms.
On the Tuesday, there was a fanfare when training credits costing £12 million next year were announced, yet on Friday letters were hand delivered under the cloak of secrecy, with no fanfares, implementing the cuts in

training. We must remember that the policy is countrywide. The Minister told us that it will be Scottish training for Scottish needs. The letter states:
As far as possible ET providers in all parts of the country are operating on a similar basis.
Where is the flexibility in that? The Government are seeking to reduce unit costs to a level which Members of Parliament are told they have no right to know.
What a way to treat trainers, managers and above all trainees. What a way to treat colleges with contracts to supply training. Nothing has happened, despite the statement that agents and managers will be contacted urgently. We still know nothing about budgets, targets or principles on the cuts. We simply have the incompetence of the Department of Employment, which will continue. We need a training inspectorate.
It keeps on happening. Suddenly the system is dug up. It happened when we changed from the community programme to employment training. A devastating document produced by the Scottish Council for Voluntary Organisations shows how may thousands of places caring for the vulnerable in society disappeared because of the indifference of the Minister. The Minister always says that the community programme involved no training, whereas employment training does. Many community programmes involved a great deal more training than some of the employment training schemes. When we made the transition from the community programme to employment training, 5,000 social care training places in Scotland—representing 55 per cent. of the total social care plans provided under the community programme—were lost. Yet the Minister says that he believes in community care. That has no credibility whatsoever.
Other sinister and disturbing things are happening. I am grateful to my hon. Friend the Member for Glasgow, Central (Mr. Watson) for bringing to my attention the parliamentary scrutiny of training. Until now it has been possible to appeal to the ombudsman, or the Parliamentary Commissioner for Administration, if it is felt that there has been some maladministration. However, the Government have now written to the ombudsman to say that they do not consider that training administered under the local enterprise companies should be subject to the ombudsman's scrutiny.
The ombudsman replied to the Office of the Minister for the Civil Service:
First, there does not appear to have been any communication by the Scottish Office or yourselves with the Select Committee on the Parliamentary Commissioner for Administration in regard to the Government's intentions regarding
Scottish Enterprise and Highlands and Islands Enterprise. Obviously there was no consultation. The letter went on:
Secondly … I would expect this aspect of the matter to be of concern to
the Select Committee.
it appears that the Government are effectively seeking to close off from citizens in Scotland who might be aggrieved at the way a local enterprise company had dealt with their affairs"—
that is a local enterprise company using public money—
an avenue of redress which—by virtue of the Training Agency's role—would nonetheless be available, it seems to me, to citizens south of the border who had similar grievances in respect of alleged maladministration by Training arid Enterprise Councils.
That redress to the ombudsman will be denied in Scotland if the Government have their way.
The ombudsman continued:


In view of the events in the House of Commons this week following the Budget statement, you may wish to put the above consideration to the Scottish Office.
He was writing in Budget week. The Government have simply ignored the wishes of the ombudsman and are trying to remove matters from public scrutiny.

Mr. Bill Walker: I wish that the hon. Gentleman would not be quite so abrupt and cavalier. I imagine that he understands the position with regard to the Select Committee on the Parliamentary Commissioner for Administration and the Scottish Development Agency. Is he aware that such quangos only recently came under the umbrella of the ombudsman? If he is, he will understand that what falls within the Committee's jurisdiction is part of the normal negotiations between that Committee and Departments. If he is aware of that, what is he complaining about?

Mr. Worthington: I am complaining that, whereas at present the affairs of the Department of Employment and training are supervised by the Select Committee on the ombudsman, when training is transferred to Scottish Enterprise and Highlands and Islands Enterprise, it will not be scrutinised by the ombudsman or the Select Committee.
Many hon. Members will have received a letter from Grand Metropolitan Community Services, which is a good friend of the Government and one of the few major companies involved in employment training. A problem with employment training is that most major companies have turned their backs on it. Mr. T. R. E. Mann, managing director of Grand Metropolitan Community Services—who, to my knowledge, is not a paid-up member of the Labour party and has no interest in supporting it—wrote a letter expressing his concern about how the Department of Employment is operating. He says:
It is impossible to get sense out of the Training Agency, where practices vary not only between regions but in some cases between the same Training Agency area office from one week to the next.
He expresses his concern about the reduction
by 30 per cent. over the next three years in expenditure on youth training and employment training.
Referring to the Government's intention to make employers pay more for training, which we do not oppose, he says:
The Training Agency has indicated that it will expect the reduction in Government funding to be made up by contributions from employers. In view of the combination of both the economic situation"—
we all know what that is—
and the standard of ET clients now available on the job market"—
that is a south of England rather than a Scottish comment—
it seems improbable that employers will be prepared to pay more for training in the foreseeable future, especially when only a small proportion of ET clients are likely to be placed with employers.
He concludes by expressing his concern about the effect on training quality:
What we have got is great financial strain on some of the providers of training at the present time.
A training inspectorate is desperately needed because of the cavalier way in which the Department of Employment—the Scottish Office is irrelevant because it has no control or influence on this matter—will continue to make abrupt

changes in practice which will affect Scottish Enterprise and Scottish LECs and prevent adequate quality training in Scotland.
I was impressed by an article on training that I read in The Economist. It quoted Mr. Brian Wolfson, who will be known to the Government as the man who has chaired selection committees for LECs in Scotland. He said that the Government had introduced into training a state of catatonic confusion, and that one local LEC had asked companies what they knew about Government schemes. The second most popular answer was a scheme that did not exist.

Mr. Bill Walker: I intervene because I was astonished by the theoretical and inept speech of the hon. Member for Clydebank and Milngavie (Mr. Worthington). When I asked a fairly straightforward question and gave him the opportunity to say what special Scottish dimension had to be taken on board, all I received was waffle about the problems——

Mr. Worthington: rose——

Mr. Walker: I will give way to the hon. Gentleman; I am not nearly as discourteous as he is. Labour Members know that I always give way.

Mr. Worthington: May I ask a practical and down-to-earth question? If there is no Scottish dimension, why does the Scottish Office claim that there is?

Mr. Walker: I did not say that there was no Scottish dimension; I asked what special Scottish dimension the hon. Gentleman was referring to, but he gave a dimension that is common throughout the United Kingdom in areas of high and relatively low unemployment. That is not a special Scottish dimension.
I was not saying that there is no need for local enterprise companies to concentrate on the special needs in their areas. Those needs will differ from area to area. I should have thought that that was common ground among those who have attempted to study the problems of training.
We are considering whether an area has shortages not in tactile skills but human relations or social skills. It must be fairly clear to the hon. Gentleman and other Labour Members that, in a constituency such as mine, where the largest employer is the tourist industry, one of the requirements is training in social and human relations skills. Textile workers in Forfar will need tactile skills, and workers in Aberfeldy or Pitlochry will need skills relevant to the whisky industry. Local enterprise companies and employers will have to recognise and train workers in the skills necessary for those tasks.
There is much common ground on training. We should not disagree about it because the United Kingdom will need a well-trained work force if it is to compete in the world of today and tomorrow. What are we talking about? New clause 11 imposes a
duty (which shall not itself be delegated) of keeping under continuous review the suitability and adequacy of any training provided by that agent".
I should have thought that we would all agree. The hon. Member for Clydebank and Milngavie seems to think that we need to set up a training inspectorate.
I spent many years as an inspector on behalf of the Royal Air Force—[Laughter.] I do not find this amusing.


The hon. Member for Fife, Central (Mr. McLeish) has an academic qualification which I respect. He should realise that my qualification took longer to obtain than a degree. It must have some relevance, especially as it relates to training. I spent years training people to fly, teaching pilots how to be instructors and examining instructors. I think that I know something about this matter, although that may be astonishing to the hon. Member for Fife, Central. I respect the views of Opposition Members whose qualifications show that they have certain abilities and have had training. I respect the hon. Gentleman in terms of education and training, because I know his record.

Mr. Watson: Does the hon. Gentleman accept that the education and training courses leading to the various qualifications of hon. Members have been validated and monitored? Is not that an important part of any training programme? Does he recognise that our proposal for an inspectorate is designed to build that into the Government's training programmes?

Mr. Walker: I acknowledge that point. I criticised the hon. Member for Clydebank and Milngavie not because of what he would like to achieve but because he made his point in an inept, academic and theoretical way. Any training mechanism needs to be checked, and the new clause enables the local enterprise companies to do that.
The hon. Member for Clydebank and Milngavie did not treat my question seriously. For what was he asking? What special Scottish needs did he identify? I am confident that the hon. Member for Fife, Central will answer.

Dr. Godman: The hon. Gentleman referred to the training needs of the tourist industry. Given that it is scattered throughout Scotland and its islands, that it is fragmented and that it is largely made up of small enterprises—often family enterprises—might not the envisaged inspectorate be able to lay down training programmes that are beneficial to tourism in all parts of Scotland?

Mr. Walker: My experience of training boards is fairly extensive. Under the old training board system, the boards began to think that they were the be-all and end-all of training authorities. I helped to set up pilot schemes and, in the beginning, was a keen supporter of training boards. I grew disillusioned because they built empires. Marks and Spencer, Trusthouse Forte and similar organisations know more about skill training than any theoretical body. I should have thought that, in the Scotch whisky industry, United Distillers, the largest whisky company, would have training schemes. If such organisations are part of the local enterprise companies, that is a basis on which we can build on what is known to work. That is preferable to setting up an inspectorate with a theoretical approach. At this early stage, I am concerned that we may not lock properly into the established bodies.
Anyone who knows anything about training knows that the same companies have invested in it. They have a reputation. When the local enterprise companies are up and running, they should be locked properly into a system involving experts in training. We will then be able to evaluate skill measurements and so on. I caution my hon. Friend the Minister because of our experience of the training boards. There is a danger that we may set up so-called training experts who become more interested in their empire than in the product—in giving people the

opportunity to be trained to alleviate shortages and inadequacies in social, tactile, management and other skills in their areas.
The Opposition should not always assume that Conservative Members are hostile to their ideas. We may not be, but unless those ideas are packaged and properly presented, the Opposition should not be suprised if we want answers to our questions.

Dr. Godman: Despite the fact that I served a six-year apprenticeship in a shipyard and years later studied for a postgraduate diploma in industrial psychology, largely based on training, I readily acknowledge that I have nowhere near the experience and knowledge of industrial training of the hon. Member for Tayside, North (Mr. Walker).
New clauses 11 and 4 are eminently compatible. If the Minister is not willing to listen to the arguments in support of new clause 4, I hope that the 10 members of Scottish Enterprise and the 10 members of Highlands and Islands Enterprise will at least listen. It might be in the interests of those organisations and local enterprise companies if There were an inspectorate or review body. I am not talking about training boards. I asked the hon. Member for Tayside, North about the relevance of the inspectorate to tourism and he answered by talking about Marks and Spencer and whisky distilleries. I believe that local enterprise companies could be helped by the development of training programmes for industries such as tourism which are to be found throughout Scotland. That might defray some of the training costs incurred by LEC's.
One of the most important elements in the training role is that of matching employers' training needs with those of employees or potential employees. In constituencies such as mine, there is often significant incompatibility between what incoming firms require and the skills of local people—not only young people but unemployed middle-aged people.
8.30 pm
The Renfrew enterprise company has a board of 18 members. Not one woman has been chosen, although in the area covered by that local enterprise company, women form about 52 per cent. of the population. In response to a comment that the Minister made earlier, I should say that I do not seek to argue the case for tokenism. There are many highly skilled and successful business women in the Inverclyde area, who could make a major contribution on that board, especially in training matters. I have every confidence in the chairman, John McClelland, who is the plant director of IBM. I readily concur with what the hon. Member for Tayside, North said on this subject. IBM is one of the companies which provide a superb training programme for their employees, so I was pleased to learn that Mr. McClelland had become the chairman of that company.
The huge problems that Inverclyde faces are not peculiar to the lower Clyde—they are problems typical of any areas of high unemployment seeking to attract new companies by means of enterprise zones. Many of the companies attracted to an enterprise zone require skilled labour. One of the first of the companies attracted to Inverclyde was the Crusader insurance company, which has already recruited a number of young people—a goodly proportion of whom have quit their employment in the local social security office to go to work for that company,


and I do not blame them for that. They have rightly concluded that they will be offered better terms and conditions of employment by Crusader than they enjoy at the DSS. About 16 employees of the DSS have gone to join Crusader; good luck to them. I only hope that the DSS in turn will take on 16 unemployed people, including some of the middle-aged people who figure all too prominently in the long list of long-term unemployed in Inverclyde.
New companies need training personnel with basic skills to take on in-house training programmes. I welcome the new clause, because I think that the local enterprise companies have a heavy responsibility to ensure that training programmes are set up in their areas, but I also support new clause 4, which advocates a review committee set up by Scottish Enterprise and Highlands and Islands Enterprise. Such a committee could assist local enterprise companies and local colleges as well as local trainers of personnel. It could also play an important role in meeting the training needs of companies, especially companies new to Scotland. Just as important—perhaps more so—it could help with the training needs of unemployed people, especially the middle-aged unemployed who are to be found in such large numbers in the ranks of the long-term unemployed.
I repeat that new clause 11 and the new clause offered by my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) are compatible proposals which would assist in meeting training needs.

Mr. McLeish: I support the comments of my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington). Most people—as usual we must exclude the Government from any consensus—are concerned about the problem of quality. The commercialisation of Government schemes is creating a crisis of investment and quality. As the hon. Member for Tayside, North (Mr. Walker) said, there is a consensus that the 1990s must be the decade of skill training and effective investment by Government and employers, but it appears that that balance is not being struck, because the Government are moving quickly out of investment and are seeking at every possible opportunity to pass the burden from the state to employers, who may or may not be ready to accommodate such an initiative.
I do not blame the Training Agency or the former officials of the Manpower Services Commission. I do not blame advisers in the Scottish Office. I blame the Government alone for their incompetence and insensitivity in allowing the Department of Employment in London and its branch section in Scotland to permit the Treasury to dictate the pace and volume of investment. That is a major reason why we have a crisis in training in Scotland and throughout the United Kingdom.
My hon. Friend the Member for Clydebank and Milngavie was right to suggest that there had been a cut of £28 million. From a review of autumn statements, public expenditure White Papers and supply estimates over the past two to three years, we have established that, on a Great Britain basis, about £250,000-worth of cuts will have been made between 1989–90 and 1990–91. It appears that, in the space of a few weeks, £250,000 has disappeared, although no Minister will admit to it. That is one of the reasons why the quality of planned programme provision including employment training and YTS is in a state of chaos, on the one hand because of incompetency and crisis and on the other because of lack of investment.
It was evident from the remarks of the Minister of State and the Secretary of State that the Scottish Office is some way responsible for the employment activities of the Department of Employment. The truth is a million miles from the fiction peddled by the Scottish Office day in, day out.
I should like to bring to the Minister's attention a sitting of the Select Committee on Employment held on Wednesday 17 January, at which evidence was taken concerning the employment service. There was an exchange of views between my hon. Friend the Member for Dundee, West (Mr. Ross) and a senior official of the Department of Employment concerning local enterprise companies and training and enterprise councils and their relationship and how the Department of Employment would be involved in overseeing their development.
In a telling exchange, minuted in paragraph 42 on page 9, the senior official from the Department was quizzed about the relationship. He remarked:
I think there will be a degree of stability and shared policy because Ministers are part of the same Government".
That has never occasioned stability and an exchange of policy in the past. He went on:
our Secretary of State as I understand it will continue to have an overriding responsibility for employment matters in Scotland.
It is clear that the Scottish Office is a poor appendage of the Department of Employment.
My hon. Friend the Member for Clydebank and Milngavie has exposed another myth, which is that the LEC initiative in Scotland reflected the Scottish culture, the Scottish labour market and its training needs and aspirations. In reality, the former Secretary of State for Employment decided to take a trip to the United States and visit Massachusetts. He visited private industry training councils in America and brought the idea back here. Transferring ideas from a different culture is always difficult. The Government made a mess of that idea in Great Britain and the Scottish Office hijacked that residual mess from America, called the principle local enterprise companies and the circle is now complete.
The idea is that we have control over our affairs in Scotland, but we do not. Local enterprise companies are supposedly an imaginative Scottish idea, but they are not. Now, savage cuts have been imposed on employment training by an English-based Treasury which has little regard for the quality of training provision. Instead, the Treasury has a high regard for keeping public expenditure constraints extremely tight indeed.
Why do estimated and outturn figures in any one year virtually automatically now become the planned provision for the following year? In 1986–87, in real terms, we were spending £4 billion on training in Great Britain. By 1992–93 that will drop to £2£8 billion. That is a cut of £1£2 billion over seven years. That is supposed a positive contribution to the skills crisis and a proper reflection of the Government's concern for people who do not have skills. That is hypocrisy, but the position is worse than that.
There is a need throughout Great Britain for the Government to work in partnership with employers. However, as my hon. Friend the Member for Clydebank and Milngavie explained, chaos has ensued as a result of the Training Agency being pressured to send a letter to employment training agents and managers. That was a


panic policy outcome of a chaotic response from the Secretary of State for Employment to training and enterprise councils in England and Wales.
Youth training is no better. The YT budget is being cut in this financial year by £164 million. The burden of expenditure is being passed to employers who have not been consulted about the fact that the £50 a week that trainees receive from the public purse is to be reduced to £33 by 1992–93. That will be a cut of one third of a billion pounds between 1990 and 1993. That will make the Government's plight even worse and that is why I believe that our concern for quality, which is at the centre of new clause 4, is crucial.
I began by saying that the commercialisation of training programmes would have a devastating impact. I believe that the Government have got themselves into such a mess that it is our responsibility to expose the travesty of the current position, in which skill needs are so great and visible that they demand to be tackled.
I sincerely hope that the Minister of State will reconsider his position on quality. As my hon. Friend the Member for Clydebank and Milngavie stated clearly, confidence in the Government's ability to handle the skills crisis is draining away by the day. If the Government continue to heap chaos upon chaos, it will be the duty of a Labour Government, when we are elected, to clear up the mess, put skills training at the top of the political agenda and earmark a sufficient amount of investment which we can use in partnership with the private sector to tackle the needs of our young people, of adults and employer-based training where the greatest deficiency exists. I hope that my comments will be taken seriously and that we do not receive off-the-cuff complacent rhetoric which, when examined, does not stand up to scrutiny.

Mr. Watson: I also want to emphasise quality in training, because it is central to the provision of training. Recently, a number of horror stories have emerged and have been well publicised, of employment training schemes which have been abused and which, by definition, have been an abuse of public funds.
It is surprising that the Minister of State should come to the House with a proposal that training programmes will be kept "under continuous review" without specifying to our satisfaction just how that will be achieved. I cannot understand why the Minister of State should be unhappy with the proposal that an inspectorate should be charged with the responsibility of ensuring that there is high quality training in the Government's schemes.
On Second Reading, I referred to several cases of abuse of employment training schemes. The Minister told me then that, if there were cases of genuine abuse, the Government would do something about them once they had been investigated. I do not know whether the Minister of State can respond further to that when he replies, but I have heard nothing since Second Reading to the effect that the Government have responded to the cases which were raised in particular by the Glasgow Evening Times in a series of articles in October and November last year.
Those articles revealed abuses including the case of a number of people who were taken on ostensibly as landscape gardeners. However, they were given nothing to do other than to build a driveway at the home of the training manager. In another case drivers were trying to

get heavy goods vehicle licences to obtain work as lorry drivers or bus drivers. However, they simply had to ferry other ET workers back and forward every morning and evening and had nothing to do in between except twiddle their thumbs.
In another case, a young woman who wanted to learn secretarial skills to improve her chances of getting a job was given nothing but the most menial tasks. Perhaps most worrying of all, a number of completely unskilled people were taken on as security guards under an ET scheme. No doubt my colleagues from other parts of Scotland could give other examples of abuse. The underlying factor is that the policing of ET is far too lax. The emphasis is not on training. In too many cases, employers see ET as a lucrative business in which to be involved and they are not too concerned about training.
The serious employers who are interested in providing training have shied away from Employment Training. Strathclyde university carried out a survey in November 1989 in which it contacted 106 companies in the private sector in Scotland. Those companies employed 80,000 people. Only 12 of them were participating in Employment Training. The other companies said that they did not consider Employment Training as meaningful training.
They also said that it was unlikely to produce the skills that they were looking for or that Employment Training did not meet their needs to the extent that they would rather involve themselves in other forms of training. That is an indictment of Employment Training which—I am prepared to give the Government the benefit of the doubt here—is intended genuinely to increase the chances of long-term unemployed and, increasingly, young people of gaining proper employment.
We must ensure that the training that is provided is of a high quality—or at least of a higher quality than has been offered hitherto. The Government's proposal to keep training schemes "under continuous review" will not achieve that end. A properly financed and resourced inspectorate with people who understand training and know what should be achieved from properly designed training programmes would be much more likely to act as a watchdog with teeth in that important area.
I am sorry that the hon. Member for Tayside, North (Mr. Walker) has left the Chamber. [HON. MEMBERS: "We are not."] Well, my colleagues may not be sorry, but I am because he commented on the complaints procedure which will be open to Scots in terms of the training provided by Scottish Enterprise, Highlands and Islands Enterprise and the local enterprise companies that are set up through them.
My hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) mentioned that there will be no recourse to the Parliamentary Commissioner for Administration for people in Scotland who wish to complain about the standard of training or maladministration by local enterprise companies. I shall not rehearse my argument about the difference in the situation between Scotland and England, serious though it is.
However, the point that I would have made to the hon. Member for Tayside, North, had he been here, is that I am aware of the length of time in which it has been possible to raise such complaints through the Parliamentary Commissioner for Administration in terms of Scottish training schemes. A letter from the parliamentary commissioner states there that there will be no "avenue of redress" for people in Scotland who are


aggrieved at the way a local enterprise company has dealt with their affairs.
That is a serious matter. It is tied up with reviewing, monitoring and inspecting at close quarters the training that is available.
I am similarly concerned about a further comment in the letter:
Scottish Office officials are considering the scope for an appropriate complaints mechanism for members of the public dissatisfied with the actions of local enterprise companies.
We have heard nothing from the Minister of State about that, and I hope that he will take the opportunity to refer to it when he replies. Perhaps consideration is continuing, but it is important that people understand what system of redress is available, particularly because the Training Agency will continue to have responsibility for training schemes through TECs in England. Complaints raised through a training agency will be able to go to the Parliamentary Commissioner for Administration, and that is a much firmer fall-back for people in England and Wales than for people in Scotland. I look forward to receiving some assurance from the Minister on that point.
It is not a matter of trying to score political points over the Government. The training of young people and the long-term unemployed is much too important to become the victim of a political slanging match. I ask the Minister of State to accept that Opposition Members care deeply about training and think that it has an important role in trying to improve the employment prospects of many people who at the moment seem to have poor prospects, if any at all. If training is to fill the skills gap, it is vital that there is a proper watchdog with teeth and a proper back-up to make sure that quality exists. Without quality, no matter how many schemes there are, we will not improve the employment prospects for people in Scotland.

Mr. Lang: I hope that the debate has been useful. It is a pity that my hon. Friend the Member for Tayside, North (Mr. Walker) is not present to hear me thank him for a short and effective intervention based on his own substantial personal experience of these matters. I heard considerably more good sense from him than from other hon. Members.

Mr. McAllion: Will the Minister of State give way?

Mr. Lang: I have said nothing controversial yet.
The hon. Member for Greenock and Port Glasgow (Dr. Godman), who unfortunately is not present either, made a thoughtful speech recognising the different complexions of training needs and skills in different parts of the country. I hope that he will reflect on what we are bringing forward through the local enterprise companies and through Scottish Enterprise to meet precisely those varieties of needs and skills. He talked about the compatibility of new clauses 11 and 4. Indeed, there is compatibility of policy intention: I hope that I made that clear at the outset. Our clause is more appropriate because it is worded in a more effective way. As I said earlier, the Opposition's new clause is defective in several respects.
I emphasise to the hon. Member for Clydebank and Milngavie (Mr. Worthington), who seemed to misunderstand the point of our new clause, that it expressly places a duty on Scottish Enterprise and Highlands and Islands Enterprise to monitor the quality of training

provided by virtue of clause 2(3) (a) or (b) and it requires that the duty itself shall not be delegated. It cannot be delegated down to local enterprise companies.
The hon. Gentleman made several points, most of which we heard in Committee, but I cannot resist the temptation to reply to the last point that he made in Committee. He drew attention to a suggestion of mine when, as a Back Bencher in 1981, I called on the Scottish Development Agency to set up a training scheme in dry-stone dyking. He seemed to think that that was an absurd and preposterous notion. I refer the hon. Gentleman to page 38 of the last year's SDA report where he will find that, during the year, a scheme of local trainingships in dry-stone dyking was instituted. It may have taken some time for me to exert influence over the SDA, but in the end I succeeded. My constituency, and no doubt other parts of Scotland, will be better for it.
The hon. Gentleman launched into his characteristic attack on employment training. The scheme is very worthwhile. It is widely welcomed by the large number of people who are taking part in it. More than 26,000 people throughout Scotland are now in employment training. More than 18,000 people have started on training since the programme began. It is more effective than the community programme precisely because of the training component. Thirty-two per cent. of all employment training starters have been unemployed for more than two years. The figure is lower on the community programme.

Mr. Worthington: How can the Minister of State say that it is more affective when there is no inspection system? He has admitted several times that there has been no scrutiny in Scotland.

Mr. Lang: The scheme is subject to increasing and more effective scrutiny. I shall refer to that point in more detail later. By comparison with the community programme that it replaces, it is engendering a greater skills component in the work force and delivering more effective results, for example for the long-term unemployed and people with long-term health problems or disabilities. Indeed, 33 per cent. of all entrants with training managers are women. That is an increase on the community programme. Also, 53 per cent. of leavers who complete training go into jobs or self-employment, compared with 42 per cent. under the community programme. It is a more effective scheme, and we shall seek to make it better instead of castigating it.

Mr. McAllion: I draw the Minister of State's attention to an article in this week's edition of The Economist, which examines the Government's training proposals and deals with employment training and youth training schemes. It describes those schemes as
elementary low-level training for school drop-outs and for the long-term unemployed which are completely incapable of bridging the skills gap which faces Scotland and Britain.
How would the Minister of State reply to the authors of that article?

Mr. Lang: I shall read the article with great care. The scheme is aimed precisely at helping a particularly difficult to place and difficult to train section of the work force and is increasingly achieving results. A special national survey of trainees shows that between 75 and 80 per cent. either agreed or strongly agreed that employment training had increased their self-confidence and improved their chances of getting a job. Of course it will not deliver the best possible training to the highest possible level. There are


other ways in which that can be delivered. However, the scheme is meeting the needs of the client group to which it is directed. Instead of sniping at the scheme in a petty way, it would be more appropriate for Opposition Members to support it and to recognise the improvement that it offers for that group in society.
The whole point of the Scottish Council for Voluntary Organisations' approach is that it was not recognised that employment training was about training for the unemployed, whereas the community programme was primarily a work experience programme. We are anxious to emphasise that training component. I urge those in the voluntary organisations to seek ways of introducing training elements into their activities and to make use of the facilities that the employment training programme can offer.
9 pm
The hon. Member for Clydebank and Milngavie raised again the old question of the relationship between the Secretary of State for Scotland and the Secretary of State for Employment. There is a national framework to ensure comparability of standards and equality of opportunity. The Government as whole will continue to develop and improve that framework, and the Secretary of State for Scotland will continue to contribute to that process.
Under the Scottish Enterprise proposals, the control of training in Scotland will rest with the Secretary of State for Scotland as from 1 April next year, and I will repeat the key points about that. Whereas the Training Agency has been responsible to the Secretary of State for Employment, Scottish Enterprise and for Highlands and Islands Enterprise will be responsible to the Secretary of State for Scotland.
Whereas the funding of training in Scotland has been the responsibility of the Secretary of State for Employment in consultation with my right hon. and learned Friend, the funding for Scottish Enterprise and for Highlands and Islands Enterprise will be provided by the Secretary of State for Scotland. He will duly consult the Secretary of State for Employment and, of course, the Treasury about the appropriate level of provision, to ensure broad consistency of approach throughout Britain.

Mr. McAllion: The Minister says that the funding for the new enterprise companies will come from the Scottish Office. The allegation is made in the article to which I referred in my previous intervention that 90 per cent. of the funding going into the new enterprise organisations will be money transferred directly from employment training and the youth training scheme, and will not provide the training bodies with the resources that they will need if they are to introduce high-level training to meet the economic needs of Scotland.

Mr. Lang: The figure that the hon. Gentleman gives is not correct; it is a smaller proportion of the total, nearer 70 than 90 per cent. In any event, that is central Government funding. In addition, there is the opportunity to attract private sector funding to lever in more private sector commitment, and I shall give figures on that later.

Mr. Worthington: As the Minister is aware, these bodies are modelled on private companies in the United States. They have been transplanted here. The most successful of those private bodies in the United States—this is revealed

in the article in The Economist, to which reference has been made—have attracted 5 per cent. of their funds from private sources.

Mr. Lang: Opposition Members love to repeat the myth that what we are doing in this country derives from what is going on in the United States. I visited a number of training activities in New England when I was in the United States. I was interested in what they were doing, but it was clear that they did not begin to come near to living up to the comprehensive approach that we are taking to employment, economic development and training. The relationship is lodged in the minds and imaginations of Opposition Members.
On the question of the relationship between ourselves and the Department of Employment, the hon. Member for Clydebank and Milngavie said in Committee that it was important for us to have compatible training schemes throughout the United Kingdom, but that that did not mean having identical schemes. That is precisely what we are seeking to achieve.
The hon. Gentleman questioned the adequacy of monitoring. That is an important point, which goes to the heart of what we are doing in the new clause. Organisations providing training under YTS and employment training must achieve approved training organisation status. Contracts with organisations that fail to meet ATO standards will not be renewed. Seven criteria govern that status: identification training needs; training designed and delivered to national standards; effective quality management; recruitment selection and competence of staff; equal opportunities; health, safety and suitability of premises and equipment; and financial viability.
There are 115 Training Agency staff in Scotland involved in checking on the attainment of ATO status and monitoring the performance of the training provided. Frequent visits to training agents and training managers are undertaken on a sampling basis and detailed reports are produced for action by training providers.
The Training Agency also carries out financial checks on all training providers and employs independent consultants to undertake a range of quality development tasks. In addition, six training standards inspectors are employed in Scotland to act independently of the Training Agency's line management to scrutinise the provision of training providers.
The hon. Member for Clydebank and Milngavie asked how many ATOs there were in Scotland. The figure that I gave in answer to a written question some weeks ago was a total of 387 for the youth training scheme. For employment training, the arrangements are still being developed. The 226 training agents and managers are currently going through the approval process. The youth training figures are now somewhere nearer to 400 than the 387 that I mentioned.

Mr. Worthington: Is the Minister saying that in relation to employment training, no organisations have achieved approved training status?

Mr. Lang: That is correct, but far from that being a bull point for the Opposition, it reflects the thoroughness and care with which these matters are being developed. In due course, ATO status will be reached and it will be an achievement worth reaching.
The hon. Gentleman mentioned the recontracting arrangements that are now taking place. Revised employment training contracts are necessary to effect the new flexibilities for employment training that we have announced and which, although grudgingly, Opposition Members have welcomed. The recontracting process is being carried out as quickly as possible to introduce changes that will benefit both providers and trainees. For the vast majority of providers it will not be a difficult process, and it will be largely complete by the end of the month. Negotiations with any remaining providers can be extended to the end of May.
The simplification of the funding basis to a single unit price will mean less bureaucracy and more flexibility for providers. The need to remove underutilised capacity is in both the Government's and the providers' interest, and I believe that the measure is sensible. An important point on which Opposition Members should reflect when they say that it demonstrates that Scotland has somehow failed to develop a new departure from the rest of the United Kingdom is that the transfer of responsibility for training matters is not due to take place until 1 April 1991.
The hon. Member for Glasgow, Central (Mr. Watson) mentioned complaints about employment training schemes. As I have said before, the Government and the Training Agency are ready to investigate fully any such complaint. I encourage any hon. Member who receives or uncovers evidence of abuse to report anything suspicious to the Training Agency or to me. All the issues raised by the Glasgow Evening Times have been investigated, and I am satisfied that there has been no serious abuse of the employment training scheme. Some minor matters of concern were identified, and have now been rectified.

Mr. Brian Wilson: The Minister has just issued a remarkable statement—that the serious allegations in the Glasgow Evening Times were not justified. I can hardly conceive that, if that is his conclusion and if the findings of the investigation were as he described, the Minister will not be asking the newspaper for a full apology and retraction, such was the seriousness of the allegations. The Minister cannot just brush them away by saying that they were not true; either he must do something about them, or the public will conclude—as I do—that every word was true. It is a serious slander of the journalist concerned to say with a snap of the fingers that the allegations were not true.

Mr. Lang: Far from its being a snap of the fingers, I am telling the hon. Member for Cunninghame, North (Mr. Wilson) the outcome of a thorough and detailed investigation. If I were to ask for an apology and for a retraction every time the Glasgow Evening Times said something that I found unattractive, unacceptable or inaccurate, it would have to run a column that would be an even more regular feature than the hon. Gentleman's column in the Glasgow Herald.

Mr. Watson: I did not understand the Minister to say that the allegations were not true. He said that he had found no evidence of serious abuse; that means that there was some abuse. To what extent are the training managers who were identified in the report as responsible still undertaking schemes with Government approval?

Mr. Lang: The status of the training managers is currently under consideration. However, I cannot give the hon. Gentleman any specific information now, because anything that I say might be prejudicial to any subsequent appeal.
Bodies that operate in a predominately commercial manner are excluded from the jurisdiction of the Parliamentary Commissioner for Administration. Both Scottish Enterprise and Highlands and Islands Enterprise will be providing many commercial services. Training and enterprise companies south of the border will not be within the jurisdiction of the PCA either, although the Training Agency will be.
The main check on the activities of a local enterprise company will be through its contract. Scottish Enterprise and Highlands and Islands Enterprise will monitor compliance with the contract, and performance against targets. In addition, local enterprise companies will be obliged by the terms of their contracts to operate a complaints procedure, under which an individual with a complaint can be assured that his case will be considered by the chief executive of the enterprise company, and if necessary by the chairman. The Government will also want to monitor such complaints.
The hon. Member for Clydebank and Milngavie raised the recurring question of training flexibilities. He seemed to be asking for evidence that our flexibilities were any different from those in the rest of the United Kingdom. The answer is that we are setting up the procedure to introduce flexibility. That flexibility will evolve and develop as the local enterprise companies get under way and develop the training schemes to meet the needs of their areas.
Opposition Members continually returned to the question of cost. I would like to see employers spending more on training: I am sure that we all recognise that training is the key to economic development and success in the 1990s and beyond. That will be even more true as we begin to face additional competition within the single European market and as we face the demographic trends that will reduce the number of young people coming into the work force.
Although the recent report "Training in Britain" identified the need for more money to be spent by employers on training, it also showed that a considerable amount of training is being undertaken by employers and that they are playing a leading role. In 1986–87, some £33 billion was spent in Great Britain on training, involving 500 million trainee days. Some £18 billion of that total expenditure was incurred by employers. Nevertheless, I should like the private sector to spend more money on training. However, it is a bit rich for the Opposition to blame the Government for reducing expenditure on training. We have substantially increased the training budget. It has fallen slightly this year, just as the Scottish Development Agency's budget—the other component of Scottish Enterprise's budget—has been substantially increased.
It would be irresponsible of the Government not to take account of changing circumstances. An important factor to take into account is the significant decline in the number of young people entering the labour market. Together with the considerable improvement in employment prospects for young people, that will inevitably result in a reduced demand for youth training.
There has also been a welcome reduction in the number of long-term unemployed. That is decreasing even faster than unemployment generally. Moreover, more young people are entering higher education. Against that background, it is entirely right to take that fact into account when preparing our budgets.

Mr. Worthington: If there were any logic in the training cuts because of a decline in unemployment or in the number of young people, what is the logic of reducing the amount of money that is spent per training place?

Mr. Lang: We have to ensure that resources are allocated in the most cost-effective way. It is highly desirable that training programmes should use taxpayers' money both economically and effectively.
Expenditure in 1988 on adult labour market training and special youth measures as a percentage of gross domestic product shows that the United Kingdom is spending more on training than West Germany, Japan and the United States. When I look at our 1988–89 budget of £2·764 billion for all training schemes and compare it with the last year of the Labour Government, who spent only £471 million on training—one sixth, in cash terms, or one third, in real terms, of what we are spending now—I see that we need no lessons from the Opposition on the commitment of resources to training.
More people arc in employment in Scotland than there were when the Labour Government left office. Unemployment is falling sharply. During the last three years, it has gone down by 170,000.
The quality of training is crucial. The clause seeks to enhance the quality of training, and I commend it to the House.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New clause 1

POWER TO MAKE DIRECTIONS REGARDING LAND USE

'(1) Where it appears to Highlands and Islands Enterprise that land within its area of operation (as defined by section 19 of this Act) is being neglected, or not used, or used in a manner inimicahle. in that opinion of the body, to the furtherance of the economic and social well-being and development of the Highlands and Islands, Highlands and Islands Enterprise shall have power, with regard to the said land, to direct the owner, or, as the ease may be, occupier, as to its future use.

(2)(a) Directions, made under subsection (1) above, may follow proposals

(i) by Highlands and Islands Enterprise, or
(ii) made to the Highlands and Islands Enterprise by interested parties, including (without prejudice to this generality) local authority councils, branches of the National Farmers' Union of Scotland, the Scottish Crofters' Union, and residents of the area in question.

(b) Highlands and Islands Enterprise may accept, reject, or, in consultation with the proposcrs, amend proposals made under subparagraph (2)(a)(ii) above.

(3) In making directions under subsection (1) above, Highlands and Islands Enterprise shall have particular regard to

(a) the prospects of real gains in local incomes,
(b) increasing local employment opportunities,
(c) the general economic, social and cultural conditions of the area,
(d0 the need to protect the environment and the natural beauty of the area, in accordance with section 4(4) of this Act.

(4)(a) Before making any directions under subsection (1) above, Highlands and Islands Enterprise shall state its reasons for those directions, setting out why it considers that, in the particular case, such directions would lead to changes in land use which would promote the development of the area, and

(b) shall make those reasons publicly available.'.—[Mrs. Ray Michie.]

Brought up, and read the First time.

Mrs. Ray Michie: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Paul Dean): With this, it will be convenient to discuss new clause 5—Misused Land—
'Where it appears to Highlands and Islands Enterprise that land is misused, or used in a way which does not assist the economic and social development of its area and that action should be taken to bring the land (in this Act referred to as "misused land") into use, the body in question:

(a) in accordance with arrangements approved by the Secretary of State, may request the owner of misused land to carry out on the land such works as appear to the body necessary to bring the land into use and may give such financial assistance to those works as the body deems expedient; and
(b) if the request is not complied with, within a reasonable time, may acquire the misused land compulsorily.'.

Mrs. Michie: I welcome the opportunity to move new clause I on land use because there was little time to discuss the issue in Committee. The new clause is designed to strengthen the powers of Highlands and Islands Enterprise over land use. However, it is necessary to consider it in the context of the Minister's answers to my amendments on compulsory purchase and ownership of land in Scotland, particularly in the Highlands and Islands. New clause 5 also refers to compulsory purchase.
The Minister painted a confusing picture. He said:
The power, although rarely used, is necessary for the development function. The power of compulsory purchase is especially useful in dealing with land whose ownership is unknown or where the whereabouts of the owner are unknown."—[Official Report, First Scottish Standing Committee, 15 February 1990; c. 332.]
Yet I seem to recall that later in the debate the Minister sought to dub me a xenophobic socialist because I objected to the sale of Scottish land to the very people to whom he referred. At least I was able to establish without a shadow of doubt that the Minister and the Tory party do not really care if large parts of Scotland are sold off into the shadowy ownership of persons or companies registered in odd places around the world. The people of the highlands and islands were interested to hear his views. Even if he does not care, they care deeply about the land on which they live and what happens to it.
The Minister came to my constituency and did me the courtesy of letting me know that he was coming. While he was there he attacked my views on the ownership of land. but he did me a service because he gave the issue considerable publicity and my constituents are now well aware of his views. Perhaps I may be able to stimulate the Minister's interest with the new clause, as he said in Committee that the use to which land was put was important.
9.15 pm
Over the years, there has been a realisation that people's policies and endeavours in relation to areas of land can vary widely. What an owner may see as the right development for his or her own best interests may be


viewed as unacceptable by those concerned with the future and productivity of the land—in other words, local people. Too often, land is purchased as a speculative activity, pushing up the cost out of all proportion to the real value and so shutting out the less affluent people—mainly Scots—who want to live and work on it.
Some estates are well run, but others are not. Some are changed for sporting or residential purposes, whereas others are just neglected, and land improvement or use becomes an unimportant aim. Inappropriate ownership can lead to the loss of rural jobs and thus to the loss of population and the running down of the area. I have seen an estate on which there was a tenant farmer, but where, when the tenant farmer ceased his tenancy, the farm was destocked and the shepherds and herdsmen had to leave. That meant that their families had to leave, so schools and local shops were closed. There was a serious knock-on effect.
The Minister said that the compulsory purchase powers in the Highlands and Islands Development Board Act 1965 were rarely used. He was right, but the real question is why. Over the years, the board has had a land use policy, but has never been able to implement it. No matter how conscious it has been of the misuse or underuse of land, it has been restricted by weak powers of compulsory purchase which were no better than those of a district council and were more suited to the aims of providing schools and roads than to providing a real economic injection and a complete overhaul of land use.
I am not convinced that the powers in the Bill are any better. I hope that the new clause will go a considerable way to rectify the problem. The new clause seeks to give Highlands and Islands Enterprise the power to direct the owner or occupier on the future use of the land to further the economic and social well-being of the highlands and islands. Proposals on land use could be brought forward not only by Highlands and Islands Enterprise, but by other interested and committed parties such as the Scottish Crofters Union, the National Farmers Union of Scotland and the residents of the area in question.
I recall that the Minister sought to ridicule my suggestion that, where appropriate, land could be handed over to crofters and young farmers for agriculture and rural development. At the time, I drew his attention to the fact that his noble Friend Lord Sanderson had agreed to look at the land owned by the Department of Agriculture and Fisheries for Scotland and at the possibility of transferring the Secretary of State's crofting estates into community trust ownership.

Mr. Lang: Before we lose sight of this point, does the hon. Lady accept that there is a difference between considering the possibility of transferring money owned by a Government Department to something such as a crofters' union and taking land from private ownership for distribution to individuals?

Mrs. Michie: My amendment seeks to direct owners of land about how they should use the land if they are misusing it.
Returning to the point about compulsory purchase powers, I am seeking to point out that those powers were part of the Highlands and Islands Development Act, (Scotland) but could never be used. I will try to explain to the House later why it was thought necessary to use them.
Perhaps the Minister is now aware that the Secretary of State has produced a consultation document on this very subject. One of the most interesting parts of that document is where it poses the question whether the approach proposed by the Secretary of State should also be considered by other crofting landlords. I welcome the document, because it suggests that Lord Sanderson is addressing the issue, although his motives may not be entirely altruistic and may have more to do with administrative costs than with anything else. I am glad that the Scottish Crofters Union has employed consultants to advise it on the way in which it should consider the matter.

Mr. Wilson: To avoid having to go over the same ground again later, may I take it that both the hon. Lady and the Minister are aware of the meetings of crofters in the areas most immediately involved—in Skye and Raasay—at which there was distinct scepticism about that proposition? I hope that, in response to the hon. Lady, the Minister will give us the assurance that if the Secretary of State's tenants in those areas do not want to be transferred into another form of ownership, their views—like those of islanders in other places—will be paramount.

Mrs. Michie: I thank the hon. Gentleman for that intervention. I hope that the Minister will give us that undertaking, because Lord Sanderson must know the views on this by the end of June.
Today there is a great demand for crofts and a growing number of young people want to be involved in crofting. With the changes in the common agricultural policy, there is increasing emphasis on diversification in agriculture and encouragement to do a variety of other things. That is what crofters have always done. I hope, therefore, that Highlands and Islands Enterprise and the local enterprise companies will be responsive to crofting needs and to the future possibilities. Despite the low agricultural income, there arc many more houses containing families in our crofting areas than, sadly, is the case in many farming areas. If we want to keep the countryside populated and, indeed, to repopulate it, and if we want to care for the environment and to see the best kind of use made of our land, crofting is a realistic answer.
In a recent lecture at Sabhal Mor Ostaig, Dr. Jim Hunter said:
In Grampian, the Lothians and elsewhere, the creation of new croft-type holdings is being seriously investigated in order to foster rural repopulation by enabling more families to establish themselves on the land in much the same way as has long been possible in our crofting areas.
I said that I would try to explain why I was worried about the compulsory purchase powers.
The debates on the 1965 Act in Hansard are full of references from this House and the other place to an assumption that the compulsory powers drafted for the Bill would have teeth which would, where necessary, be used. The then Secretary of State for Scotland, Willie Ross, said:
Surely, one of the first powers which must be given is a power related to the proper use of the land itself. To my mind, this is basic to any improvements in the Highlands. Anyone who denies the Board powers over land is suggesting that the Board should not function effectively at all."—[Official Report, 16 March 1965; Vol. 708, c. 1082.]
It is clear that the powers of compulsory acquisition were intended to refer to rural land use but with the passage of time there was a general disillusionment as it became evident that the powers conferred were ineffective.
The new clause is in no way extreme and I have sought to make it compatible with the general thrust of the Bill in terms of local incomes and employment opportunities and the general economic, social and cultural condition of the area, with particular emphasis on the cultural. If, on the one hand, there is support for the Gaelic language, music, traditions and people and, on the other hand, the ownership of land is in the hands of a few, which militates against local people making a livelihood and surviving, the policy of support for those people becomes a waste of time.
I have also included in the new clause the need to protect the environment and the natural beauty of the area, as already spelt out in the Bill. Furthermore, under subsection (4), Highlands and Islands Enterprise would not be able to make any directions without stating its reasons for considering that such directions would lead to changes in land use which would promote the development of the area. It also makes it incumbent on Highlands and Islands Enterprise to make those reasons publicly available to everyone.
So crucial is the question of land ownership and use that it is essential that Highlands and Islands Enterprise should come up with an indicative strategy for the whole area. That should include forestry planting, fish farming, tourism and agriculture, so that potential investors will have a much better idea which areas are suitable for particular types of development and which are not.
It may be difficult for the Minister to understand what I am saying, but I am trying to explain that there is a deep and abiding affinity between the people in the highlands and islands and the land on which they and their ancestors have worked and lived over the years. I believe in a property-owning democracy, but there is something fundamentally wrong with the way in which vast tracts of land are trapped in the hands of a few and are not accessible to the local community. There should be a far greater opportunity for many more people to have a share in the working of the land. It is my firm belief that the land belongs not to the Government, not to speculators, not to Highlands and Islands Enterprise, but to the people, and I put that to the Minister in all seriousness.

Sir Hector Monro: One may not appreciate it when listening to the hon. Member for Argyll and Bute (Mrs. Michie), but both her new clause and the Opposition's new clause 5 contain astonishingly draconian measures that attempt to fulfil their ideals. Despite the hon. Lady's Liberal background, her ideas of compulsory purchase and bureaucracy fill me with horror. It is right that we should call her to order about what she is trying to do to the highlands and islands through her new clause and should call the Opposition to order for what they are trying to do through their new clause.

Mrs. Ray Michie: There is nothing in my new clause about compulsory purchase.

Sir Hector Monro: I shall come to the details of the new clause in a moment.
I was on the Committee that considered what was then the Highlands and Islands Development (Scotland) Bill in 1965. One of our chief concerns was compulsory purchase, which the Bill enacted. The hon. Lady is wrong to say that those powers were not sufficient. Under the Act, the Highlands and Islands development board could

compulsorily purchase land if it so wished. However, over a long period of constructive and efficient operation, the board never thought it fit to use those powers in the way suggested by the hon. Lady, by buying large estates and splitting them up. It used the powers to buy small developments and for other requirements, as the local authority does today.

Sir Russell Johnston: I, too, served on that Committee. Does the hon. Gentleman recall that the late Michael Noble, speaking on behalf of the Conservative Opposition, described the Bill as a "Marxist proposition". Is not the hon. Gentleman falling into that trap in his response to my hon. Friend?

Sir Hector Monro: I have not really started to deal 'An th the hon. Lady. I have said that the Act gave the Highlands and Islands development board full powers of compulsory purchase and, of its own volition, the board did not use those powers to purchase estates in the way implied in the new clause. I have the highest regard for the board and I have had pleasure in watching its operation since 1966. It never felt it necessary compulsorily to purchase estates and split them up or to run estates itself. It was far too wise to do so, and could see that it was unnecessary.
The hon. Lady did not speak about the cost of these proposals. Many of the highland estates are well run. Whoever monitors them, whether it is an agricultural adviser, planning official or somebody interested in nature conservation or habitat, to check on whether they are run effectively, or have been neglected or are run to the economic or social well-being of the district, it will cost a great deal of money. How much additional finance would Highlands and Islands Enterprise require if it were to fulfil all these obligations?
Furthermore, what the hon. Lady or the members of some committee may think is neglect may not be so at all. Running an estate is a complicated operation, bearing in mind the winter keep and grazing, whether it is for cattle, sheep or deer. What may look like neglect in the summer may be provision for winter keep. It would be very hard for anyone not particularly involved in agriculture to come to a firm judgment about the well-being of an estate.
I have travelled a great deal in the highlands, and I firmly believe that the large highland estates are well run. Obviously, the better that they are run, the more local employment will be created. We should do all that we can to encourage and promote the rural economy in Scotland: I agree with the hon. Lady on that. It is obvious that, if the population in a rural area declines, the village school will close, the parish church will begin to fall down, the village hall will get into financial difficulties and the community will fall apart. Population is of the greatest importance in any rural area, but particularly in the highlands.
Sometimes I think that, rather than criticising the running of highland estates as the hon. Lady has done., we should direct our attention towards the planning authorities throughout Scotland. Sometimes they are astonishingly restrictive about the developments that they will allow in rural areas, such as individual houses which, if they are built with sound materials and are of a good design, can add to the scenic beauty of an area. If we do not allow houses to be built and we do not allow small rural craft developments or diversification for farms who are facing difficulties these days, the population in rural areas will decline.
Rather than criticise those who run estates, we should consider the people who prevent development and prevent people from moving to the countryside—people, among others, with young children who can make the rural community viable and enjoyable.

Mr. Wilson: Since the hon. Gentleman rightly supports the idea of people living in the countryside, and since there is an enormous contrast between the numbers who live in areas which are under crofting tenure and those in areas which are not, would he support an extension of crofting to the rest of the highlands, as I certainly would?

Sir Hector Monro: I do not want to get too deeply involved in the subject of crofting tenure, because, as the hon. Gentleman knows, it is a particularly complex issue. Of course I welcome crofters having a share of the prosperity in the highlands and I welcome diversification for farming land. I also welcome any opportunities for assistance to crofters. The Government have done a great deal to help them, and I am sure that they are working on more plans to help them in the future, because crofters are an important part of the highland community.
However, before buying farm land to split into crofts, we must consider carefully. That happened on the Solway shore after the great war in 1919. The Mansfield estates were bought and split into small farms, but, almost without exception, they had to be almagamated into larger farms by the Department of Agriculture and Fisheries to make them viable. We should not confine our consideration to small farms, but should consider also what else is genuinely viable in agricultural terms.
Crafts and tourism may provide added opportunities for crofters, but I would be worried to think that it was a general view that many people could make a living out of crofting, as the size of a croft makes it difficult. Larger farms now have great difficulty in paying their way.

Mrs. Ray Michie: Perhaps the hon. Gentleman is not aware that few small crofts are agriculturally viable. I have been trying to tell him that the crofter has always had to have some other occupation in order to survive, but the fact that he works on the land makes all the difference to land use.

Sir Hector Monro: I think that the hon. Lady has just repeated what I said. We share a belief in the importance of the crofter and the croft, and we accept that crofts are unlikely to be viable, given their average size. Crofters need a craft, tourism or some other occupation if they are to make the croft economically viable and support a family.
The sporting side of many large estates is valuable in terms of employment. We must not criticise sport as such, as there are many more employees on estates if there are gillies for fishing, gamekeepers and stalkers who know a lot about the countryside and put everything they can back into the countryside to make it a beautiful place. One should not criticise sporting estates, because if one removed the sporting aspect and tried to run just a few herds of sheep or a few cattle, the number of employees would drop dramatically, causing exactly the reverse of what the hon. Lady and I wish to do to keep people in the countryside.
I oppose new clause 5 because it is a return to compulsory purchase of land in private ownership. That would be totally wrong; it would be bureaucratic and would not produce results. While the hon. Lady and I appreciate what is needed in the highlands, she is going about it in the wrong way. We want to encourage people there to develop in the right way without holding over their heads in legislation draconian measures that can be taken by people who may not know a great deal about running estates, farms or crofts.
On those grounds alone, while I appreciate what is in the hon. Lady's heart, her new clause will not produce an answer for Scotland. We have to achieve much more of a balance and a compromise and find the right way forward to help people, but new clause 1 would hold the sword of Damocles over their heads—if they do not do what the Highlands and Islands Enterprise board thinks they should be doing, severe measures will be taken against them. I am sure that my hon. Friend the Minister will agree that the House should not accept new clause 1.

Mr. Wilson: The picture of the highlands and islands covered by well-run estates would not be immediately recognised by most of us who spend a fair proportion of our lives there. The speech of the hon. Member for Dumfries (Sir H. Monro) was interesting in one respect, when he mentioned the holdings that were created on the Solway after the first world war. That was a time of great land agitation in the highlands and islands and in other parts of Scotland, which resulted in Governments being to forced to take over land, estates and farms and break them up into holdings.
I wish to take the debate back to the highlands and islands. Whatever has happened in the Solway, the takeovers in the highlands and islands have been a great success for the past 80 years. The creation of holdings in many areas created communities which survive to the present day.
The point about crofting and the expansion of that social system, which we should like to emerge from this and other legislation, is not that it provides full-time agricultural employment, which, by and large, it does not, but that it acts as the social cement which keeps communities together. If people have access to a bit of land where they can build a house, they can gain part of their livelihood from the land and they can supplement it with some other employment. That is the triumph of the crofting system, and it is unique in Scottish terms.
The hon. Member for Dumfries had a go at the hon. Member for Argyll and Bute (Mrs. Michie) on the ground that her new clause was seeking a draconian imposition. I always think of the hon. Lady—and the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston)—as Liberals, and give their party no other fancy title. I recognise that the Liberal party has a great historic record on this issue.
It would be interesting to debate whether the reason why the hon. Members for Argyll and Bute and for Inverness, Nairn and Lochaber are Members is not so much what they have done in the 1980s as what the Liberal party did in the 1880s. It is still regarded in the highlands and islands as the party of land reform which took on the Tory interests. Under the Crofters' Holdings (Scotland) Acts of 1885 and 1886, it gave absolute security of tenure to people in many parts of the highlands and islands. The tragedy was that those acts did nut apply to all the


highlands and islands and areas beyond. The double tragedy was that, apart from the land raids to which the hon. Member for Dumfries obliquely referred, although not in that name, the system was never extended.
9.45 pm
The reason why the extension of the system is so desirable is evidenced in every part of the highlands and islands. Where crofting tenure applies and has applied for decades, there are living communities—shops, schools and churches—and, above all, people. Where it does not apply, there is emptiness, barrenness and land that is unworked and neglected and often consists of private kingdoms presided over by grandees.
At least tonight we are discussing people and social and economic issues in the highlands and islands; yesterday, the other place discussed capercaillies. It was rich for members of the other place to discuss why the capercaillie is a disappearing species when many of them contributed to blasting them out of existence.

Sir Hector Monro: The hon. Gentleman must not exaggerate and talk more rubbish than normal. The noble Lord Sanderson said that habitat has led to the reduction in capercaillie.

Mr. Wilson: I cannot square the circle that, by shooting birds, one does not reduce their numbers. Many of the highlands estates are public disgraces and have been condemned as such by the Royal Society for the Protection of Birds. The sky above those estates is almost empty because of the policies pursued by them. But the capercaillie is only threatened; compared with the Conservative party in the highlands and islands, it is alive and well.
From time to time, we have debates—in my view it is a fairly sterile argument—about the Tory mandate in Scotland. We should be in no doubt that, whatever mandate the Tories have in the rest of Scotland, they have even less in the highlands and islands. One of the great triumphs of Scottish politics in my lifetime is that they have been completely erased from the map of Highlands and Islands. From Muckle Flugga to Macrihanish they do not return a single Tory Member.
As a native of the county that the hon. Member for Argyll and Bute represents, I am particularly pleased to see the transition there, which doubtless will not be reversed as a result of the Minister's excursions into that territory. The Government's action in the highlands and islands and their meddling with the Highlands and Islands development board do not, therefore, stem from any electoral mandate from the people of the area.
It is also worth remembering when Tories talk about the Highlands and Islands development board that they fought its creation tooth and nail. I noticed from looking through Hansard that the Liberal party advocated the creation of a highlands board for many years before it was created. The hon. Member for Inverness, Nairn and Lochaber was a Member when the Bill was passed. He will recall that the Tories opposed it and described it, in the words of the late Michael Noble, as a Marxist enterprise. They argued against it, especially because of the powers that they perceived it was being given over land. Its creation was the burning issue of Scottish politics in the 1960s. People overwhelmingly welcomed the fact that here

at last was the challenge to the power of landlordism in the highlands and islands—the creation of the Highlands and Islands development board.
It is worth placing on record the words of Willie Ross in that debate almost exactly 25 years ago:
If there is bitterness in my voice, I can assure the House that there is bitterness in Scotland, too, when we recollect the history of these areas. We have to put this aside, however, to do what we are all now determined must be done to redress history. We have 9 million acres, where 275,000 people live, and we are short of land. Surely, one of the first powers which must be given is a power related to the proper use of the land itself. In my mind, this is basic to any improvement in the Highlands. Anyone who denies the Board powers over land is suggesting that the Board should not function effectively at all. Let us appreciate what we are up against.
With the exception of the Conservative Members, everyone cheered. Willie Ross was more specific:
Clause 4 empowers the Board to acquire land—by compulsion if necessary—and to manage it … land is the basic natural resource of the Highlands and any plan for economic and social development would be meaningless if proper use of the land were not a part of it."—[Official Report, 16 March 1965; Vol. 708, c. 1082–89.]
That was true then and it is true today.

Sir Hector Monro: If Lord Ross said all that and hat provision was made in the legislation, why did the board, in its careful judgment, never use it?

Mr. Wilson: If the hon. Gentleman can bear the suspense and follow the chronology, I shall explain all to him.
Willie Ross was right and the Scottish people, particularly those from the highlands and islands, welcomed every word. It is indeed eccentric for any development organisation to be set up to address the problems of underdevelopment and depopulation, whether in the highlands and islands or anywhere else in the world, without first dealing with the distribution of land ownership. Whether it is in the great highland wildernesses or a Third-world dictatorship, the ownership and use of land predetermine other social conditions.
But as the hon. Member for Dumfries pointed out, the years went by and the powers were not used. It was gradually discovered that this was because the powers believed to have been in the Act were not in it. Section 4, which created the HIDB, did not give it the wide-ranging powers that it was widely believed to have given. Reading the debates with the power of hindsight, I realise that the man who realised that those powers had not been given was Michael Noble, the landowning shadow Secretary of State for Scotland. He realised that, for all the talk about the powers that were given, they had not been given.
This finally came to a head in the early 1970s on the issue of the island of Raasay, a matter with which the hon. Member for Inverness, Nairn and Lochaber is more than familiar. On the island of Raasay there was the ultimate in obstructive highland landowners—Dr. John W. Green of Cooden in Sussex, an eccentric by any standard, who had acquired his properties from the Department of Agriculture and Fisheries for Scotland in a sale which I believe to this day would have some difficulty in standing legal scrutiny. For reasons that were perverse, to say the least, he decided to use that power of ownership specifically to obstruct any possibility of development on Raasay. The population of Raasay plummeted, Dr. Green sat in Cooden in Sussex and nothing could happen on


Raasay because of the malign power that he exerted—one of the model highland landowners with whom the hon. Member for Dumfries recently dealt.
The HIDB wanted to use powers, but powers that it did not have. That was the point at which it became apparent to people that the powers that had been given to it under the legislation were no less and no more than those that reside with any local authority. In other words, as the hon. Member for Argyll and Bute said, if it wanted to buy a pocket handkerchief of land on which to build a school or community centre, it could do that. If it wanted to take over a swathe of land and contribute to its social and economic development, it could not; it did not have the powers to do so. I wish that I had been around at the time to investigate the reasons why that illusion was created in the public and political mind. Why were the people of Scotland told that the powers were being given to the HIDB—when someone at St. Andrew's house clearly knew that it was being given no such powers? It has never since had those powers.

Sir Russell Johnston: Before the hon. Gentleman leaves the chronology, may I support him in his views? He is absolutely right in saying that we all believed that the HIDB had the powers that he described, until well into the Green saga. Only latterly was it realised that it did not.

Mr. Wilson: I am grateful to the hon. Gentleman for his confirmation, which has destroyed the only argument advanced by Conservative Members—that the powers existed and were never used. In fact, the whole thing was a misunderstanding, an error of perception.
A few more years went by until, under a Labour Government, admittedly belatedly, the HIDB attempted to do something about the matter. Under the chairmanship of Sir Kenneth Alexander, it formulated proposals that would have allowed it to acquire powers similar to those that it had always been believed to possess. Those lesser powers would have allowed the HIDB to take over land if a community came to it or to the Government and said, "This land is grossly neglected and underused. We want it to be taken over, not by faceless bureaucracy but into a form of community ownership." The proposals were overtaken by the 1979 general election. The right hon. Member for Ayr (Mr. Younger) became Secretary of State for Scotland and they were thrown out.
That is the history of the HIDB and land ownership. We are merely trying to give the HIDB powers that it was intended to have and that the people of Scotland believed it had but of which it had been deprived by cruel deception and greatly to its cost.
The result has been that, in its 25 years, the HIDB has worked with one hand tied behind its back. It is an insult to anyone's intelligence to suggest that one can inherit a distribution of land ownership as grotesque as that which exists in the highlands and islands and superimpose development upon it. The communities and islands in question often have a scatter of people pushed by the forces of history to the edges of estates, from which, historically, they have worked to contribute to the wealth of the landowner. That is why people are on the fringes: the part of the community which should be supporting the people, enterprise and production was given over 100 years

ago to the shooting of wild creatures. That is why people are huddled on the periphery, with thousands of acres behind them lying idle and unproductive.
It is absurd to suggest that one can impose development on such areas fully or comprehensively without first tackling the problem of ownership and all that flows from it. The HIDB, a Labour creation, supported by the Liberals for many years in the face of Tory opposition and hostility, has had many successes. The areas in which it is a failure and in which depopulation continues to be the norm are those in which the power of land ownership and the maldistribution of population are most severe—in other words, the peripheral areas.
Every time an estate comes on to the market, the land and the people are put into a great lottery. Will it be a philanthropist who buys them or a cruel person from Scotland—I make no racial distinction—or overseas? The nationality of who owns the estate does not matter. Most of the worst landlords in Scottish history have not been English, American of foreign. They have been Scottish. Perhaps that explains why no members of the Scottish National party, who like to pervert this aspect of the debate, have graced the Chamber this evening.
The press like the colourful manifestations of land ownership in Scotland. They like the colourful personalities. I would contend that the real ownership story of land in Scotland overwhelmingly involves——

It being Ten o'clock, the debate stood adjourned.

Ordered,
That, at this day's sitting, the Enterprise and New Towns (Scotland) Bill may be proceeded with, though opposed, until any hour.—[Mr. Lightbown.]

As amended (in the Standing Committee), again considered.

Question again proposed, That the clause be read a Second time.

Mr. Wilson: A front page in the Daily Record this week was devoted to a one-time soft porn queen whose billion-dollar divorce settlement from her elderly husband, a Mr. John Kluge, the richest man in America, is to include the keys to a £13 million Scottish estate beside Balmoral. Apparently that estate runs to 20,000 acres.
Most intelligent people on the Opposition Benches would agree that that is not a terribly sensible way to allocate the ownership of 20,000 acres of land. But over the years, it is not the American porn queens who have screwed the highlands and islands of Scotland. The kilted grandees who have been there for generations have done that. Give me a social-climbing stripper any day, if it is a choice between her and a Vestey or a Westminster.

Mr. Bill Walker: For the sake of accurancy, does the hon. Gentleman accept that the estate to which he has just referred is not in the HIDB area? If he thinks it is, he must accept that my constituency is in the highlands.

Mr. Wilson: The hon. Gentleman is a well-known geographer and I accept entirely what he says. We are talking about the HIDB area, which I would gladly extend to his constituency and to the area to which I have just referred.
The caricature example that I have just given is not the norm in Scotland. Neglect comes by and large from land-owners who have been in Scotland not for days or years but for generations.
I assure Ministers that there is minimal enthusiasm for Highlands and Islands Enterprise and LECs in the highlands and islands. It is an unwanted interference because people are overwhelmingly satisfied with the job that the HIDB is doing. That interference is a further example of the alienation between a political party that cannot achieve representation in the area and the people upon whom all this nonsense is being imposed.
If we must have Highlands and Islands Enterprise, it should have the powers to which I have referred. We do not expect to get those powers from this debate, but we will keep the issue on the agenda. The problem of land ownership in the highlands and islands is as real now as it was in 1965. Indeed, it is as real now in many areas as it was after the great war because the people in those areas and their successors have now disappeared from the land.
One of my predecessors, Archie Manuel, came from Morvern in Argyll. In the debate that set up the Highlands and Islands development board. he said that he hoped that the HIDB would
create vigour and life throughout our Highland communities where at present we see, in certain areas, nothing but decay, depopulation and a gradually worsening situation.—[Official Report, 16 March 1965; Vol. 705, c. 1136.]
Over 25 years, the HIDB has done great work and in many respects it has justified the faith placed in it. The one respect in which it has been a disappointment to the people of the highlands and islands has been the failure to come to grips with the land question. It did not come to grips with the land question because it did not have the powers to do so. We say that, in future, it should have the powers to do so.

Mr. Lang: Nobody doubts the concern and affection of the hon. Member for Cunninghame, North (Mr. Wilson), or indeed that of the hon. Member or Argyll and Bute (Mrs. Mitchie), for the islands, but that concern and affection are not confined to the Opposition. Although I share hon. Members' views about the importance of the highlands and islands and their great qualities, I cannot accept their approach to the implementation of these measures as a way of seeking to advance economic development or success there.
When the hon. Gentleman referred to Conservative Members in the highlands being as scarce as capercaillies, I could not resist reflecting on the fact that, when electoral popularity was put to the test in the European elections last year, the highland seat was won not by a Labour Member or by a Liberal, or indeed by a Conservative. However, we moved from third to second. In the doughty person of Sir Albert McQuarrie, we thrashed Labour into third place, and the Liberals came last with less than 10 per cent. of the vote. I hope one day to see as many Conservative Members in the highlands as there are capercaillies.
We have made some progress in the debate. We have moved on from compulsory land purchase, to which the hon. Member for Argyll and Bute referred in Committee to land use. As my hon. Friend the Member for Dumfries (Sir H. Monro) said in his excellent contribution, we are all concerned about the most efficient and productive use of the land. There is no difference between us on the objective. The question is how we can best reach it. I know that the question of highland land use is difficult and long-standing. I recognise that it is extremely important. My noble Friend Lord Sanderson recently published a consultation paper on the future of Department of

Agriculture and Fisheries for Scottish-owned crofting land in the highlands and islands. Effective use of the land is necessary, especially in more remote and peripheral areas. No doubt my noble Friend will read the report of this debate with interest and be able to form part of the consultation process.
We must remember also that the need for rural economic diversification exists, often away from land-based activities. We now have opportunities in fish farming and in tourism, with all that that means for crafts and for culture, which benefit many parts of the highlands in ways that we barely could have dreamed of even 20 years ago.

Sir Russell Johnston: Does the Minister of State agree that, in the past, there were examples of quite bad landlords in the highlands? If so, why will he not agree to do anything about it?

Mr. Lang: There are bad landlords in the highlands and there are bad landlords in the lowlands—there are bad landlords everywhere. There are legislative processes to protect some people from some of the activities of landlords. I do not believe that the compulsory powers that the party that used to proclaim itself the Liberal party would seek to impose—it is now the Liberal Democratic party, although this measure is illiberal and undemocratic—would solve the problem.
I could understand such an approach if the highlands were in decline—if there were clearances and depopulation—but that is not the case. There are signs of dramatic changes and improvements in the highlands. The population in the highlands has increased for the first time in more than 100 years—by 8 per cent. in the past 19 years. That has been widespread throughout the area. There are many factors behind that change, and the role of the Highlands and Islands development board is undoubtedly one.

Mrs. Ray Michie: I have queried the Minister of State's assumptions before. Perhaps he does not realise that, even if the population has increased, the indigenous population of the highlands and islands has not increased. People are still leaving partly because they are not able to get land and partly because they are not able to get houses. The population may have increased, but the people whom we are particularly concerned about are still leaving.

Mr. Lang: Surely it is not part of our purpose to compel people to remain in one part or another part of the country. This is the United Kingdom. The attractive point about the highlands is that it is attracting population into the area. That is creating economic growth and greater prosperity. The hon. Lady must know that that is happening on a greater scale than before.
The board already has wide powers to assist the land sector. Its development programmes for Skye and the north-west have attracted wide local support and have contributed to a revival of interest in and commitment to crofting in those areas.
Since 1979, the board has provided £30 million to support land development in the highlands and islands. That is in addition to the normal mechanisms of agricultural support that operate in the area. But I cannot accept that there is any justification for sweeping new powers that my hon. Friend the Member for Dumfries rightly described as draconian. They would introduce a


kind of corporatism and state intervention that is totally unacceptable, so I am unable to accept the hon. Lady's new clause.
If that is the case with her new clause, it is all the more so with the Labour new clause, which goes further and seeks to impose not only compulsory land use powers but compulsory purchase powers. That is completely unacceptable and incompatible with the economic growth and development that is being achieved in the highlands in response to Government policies.

Question put and negatived.

Clause 2

FUNCTIONS IN RELATION TO TRAINING FOR EMPLOYMENT
ETC.

Amendments made: No. I, in page 2, line 12, after '(1)' insert
'Without prejudice to section (Encouragement of women, members of minority racial groups and disabled persons to take advantage of opportunities for certain work etc.) of this Act,'.

No. 2, in page 2, line 35, after Tor' insert '(and types of)'.

No. 3, in page 2, line 36, leave out 'or'.

No. 4, in page 2, line 36, at end insert
'or to persons of any racial group (as defined in section 3(1) of the Race Relations Act 1976) which constitutes a minority within the population of Scotland'.—[Mr. Lang]

Clause 3

FURTHER PROVISION AS REGARDS FUNCTIONS OF SCOTTISH
ENTERPRISE

Amendments made: No. 5, in page 3, line 36, at end insert—
'(bb) assist the establishment or growth of community enterprises or co-operative enterprises;'.

No. 6, in page 4, line 10, at end insert—
'(2A) In subsection (1)(bb) above—
'community enterprise' means a body corporate which—

(a) in the opinion of Scottish Enterprise contributes or will contribute to the economic and social development of a particular area of Scotland;
(b) by its written constitution admits to membership only—

(i) persons resident in, or employed in, that area (or both so resident and so employed); or
(ii) persons nominated by such persons as are mentioned in sub-paragraph (i) above; and

(c) by that constitution prohibits distribution of profits amongst its members; and

co-operative enterprise means a body which fulfills the criteria specified in paragraphs (a) and (b) of section 2(2) of the Industrial Common Ownership Act 1976 (whether or not it has been certified by the Secretary of State under that section).'.—[Mr. Lang.]

Clause 4

FURTHER PROVISION AS REGARDS FUNCTIONS OF
HIGHLANDS AND ISLANDS ENTERPRISE

Amendments made: No. 7, in page 5, line 1, leave out 'Subject to subsection (3) below,'.

No. 8, in page 5, line 4, leave out subsection (3).

No. 9, in page 5, line 19, leave out from 'of' to second 'the' in line 20 and insert
'safeguarding—

(a) the natural beauty of the countryside in;
(b) the flora and fauna of; and


(c) the geological and geomorphological features of special interest of,'.—[Mr. Lang.]

Clause 5

DEVELOPMENT AND IMPROVEMENT OF THE
ENVIRONMENT

Amendment made: No. 10, in page 5, line 44, leave out subsections (4) to (6).—[Mr. Lang.]

Clause 7

GENERAL AND SPECIFIC POWERS

Amendments made: No. 11, in page 7, line 29, after first 'agent', insert
'(who, without prejudice to the generality of this paragraph, may be the Secretary of State)'.
No. 12, in page 7, line 33, at end insert—
'(11) forming and registering societies, or joining with any other person in forming and registering societies, under the Industrial and Provident Societies Act 1965;'.—[Mr. Lang.]

Clause 8

POWERS OF ENTRY

Amendment made: No. 13, in page 10, line 25, leave out from `least' to `fourteen' in line 26.—[Mr. Lang.]

Clause 12

RESTRICTIONS ON EXERCISE OF CERTAIN POWERS

Amendment made: No. 14, in page 15, line 14, leave out 'and (1)' and insert '(1) and (11)'.—[Mr. Lang.]

Clause 13

POWER OF SECRETARY OF STATE TO GIVE DIRECTION

Mr. Archy Kirkwood: I beg to move amendment No. 28, in page 15, line 43, after 'to', insert—
'(i) any additional subsidiary functions as he deems necessary for it to meet any needs which may emerge in the future; and
(ii)'.
I am conscious of the constraints of time and I assure the hon. Member for Dunfries (Sir H. Monro) with whom I am sharing a sleeper later this evening—[HON. MEMBERS: "Oh."]—in the same coach, but in different compartments—that I shall not take too long dealing with this issue.
The purpose of my amendment is to make a belated and brief attempt to persuade the Government to look again at the possibility of creating some additional functions when the new local enterprise companies are set up. It will come as no surprise to the Minister of State to hear that one new function which I believe will be worthy of consideration for Scottish Enterprise is a social function.
The Standing Committee, on which I was not privileged to serve, considered at some length the possibility of creating a social function for Scottish Enterprise, and I pay tribute to the way in which the arguments on that were adduced by my hon. Friend the Member for Argyll and Bute (Mrs. Michie). I do not wish to rehearse those arguments again, but the Minister will know that the Highlands and Islands development board has been strengthened in the recent past by having an explicit legal and social function, which it has used to great effect.
10.15 pm
The Government's rebuttal of the arguments of my hon. Friend the Member for Argyll and Bute was based on the assumption that, because the Highlands and Islands development board previously had certain powers, Highlands and Islands Enterprise should have those powers for that reason if for no other, but that the Scottish Development Agency did not have the social function previously, Scottish Enterprise should not have it in the future. That does not seem to he a positive argument.
The Minister must address his mind to why he is seeking to exercise blatant discrimination against the areas that I represent in the Borders and those represented by the Minister and his hon. Friend the Member for Dumfries. The provision of the social obligation on the HIDB has been a success. No one denies that. Geographical factors are more of a problem in the highlands than in the south-east or the south-west of Scotland. If the experiment has been successful in the highlands, and if there is now an opportunity to create a social function in Scottish Enterprise, it is incumbent on the Government to say why they will not countenance extending the social function now, never mind in the future.
My amendment seeks to address the need at some future date. It is a probing amendment, intended to draw the Government's attention to the existence of the social obligation. The Minister still has time in the remaining stages of the Bill in the other place to examine the positive arguments for creating a social oligation, and a legal right and title for Scottish Enterprise and the subsidiary local enterprise companies to have a social function.
If the hon. Member for Dumfries were here, I am sure that he would agree with me that the Scottish Development Agency did some splendid work in the Borders and in Dumfries. It was clearly moving in the direction of rural initiatives, which were achieving considerable success in the Borders. It was doing that by stretching its economic development powers to the limit. It would have been easier for the SDA to achieve even more success, and to carry out its village and rural projects with greater flexibility, if it had had explicit powers.
I have the highest respect for those involved in setting up the local enterprise company in the Borders. I am sure that they will do their best for the area, subject to the constraints of the legislation, but the company would be better able to serve the needs of local people if the two words in my amendment were added to its remit. When the Minister devolves power to local enterprise companies in the Borders and to those in south-west Scotland, will there be no social element in the contract? It makes sense to consider the special circumstances which surround local enterprise companies. The market forces in the Borders are completely different from those which apply in Strathclyde.
The Government ought to consider all the arguments again. The discretionary power could be used sparingly. It would not lead to the expenditure of a great deal of additional money. It would be pig-headed and bureaucratic of the Minister not to accept that argument. The Government's answer—they have used this argument before—will no doubt be that the Borders do not merit special treatment. The people in the Borders do not accept that argument; nor do those who are running local

enterprise companies. The Minister should at least give the House an undertaking that he will consider again carefully the arguments for creating a new social obligation.

Mr. Lang: The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) was not a member of the Standing Committee which considered the Bill, so he was unable to take part in the debates on this issue.
The amendment would give the Secretary of State sweeping new powers and enable him to bypass Parliament. The reason that the hon. Gentleman gave for seeking to amend the Bill is unacceptable. A social function used to exist in the Highlands and Islands development board area. We gave a commitment that the HIDB powers would be incorporated in the new legislation. The social function is therefore maintained in the highlands and islands area. That reflects the difference between the highlands and islands area and the rest of Scotland, which in turn reflects the reason for having a separate board for the highlands and islands and a separate board for the south of Scotland.
It would not be in the interests of the effective delivery of what we plan through Scottish Enterprise or the Highlands and Islands development board for that social function to come through in the dominant way that the hon. Gentleman suggests. The delivery of employment and of the economic and training measures in the Scottish Enterprise area must not be diluted or vitiated by the inclusion of a social function. That would damage rather than improve its capacity to deliver successful schemes in the Borders and elsewhere.
The new bodies are economically driven and they will inherit the functions and powers of the previous bodies. A social function should not be added to the list of those activities. Worded as it is, therefore, I must resist such a sweeping amendment.

Amendment negatived.

Clause 16

PROHIBITION ON DISCRIMINATION IN PROVISION OF
CERTAIN FACILITIES OR SERVICES

Amendment made: No. 15, in page 16, line 37, leave out subsections (1) and (2) and insert—
'in sections 16 of the Sex Discrimination Act 1975 and 15 of the Race Relations Act 1976 (prohibitions on discrimination in provision of facilities or services under section 2 of the Employment and Training Act 1973), there shall in each case after subsection (1) be inserted the following subsection—
(1A) It is unlawful for Scottish Enterprise or Highlands and Islands Enterprise to discriminate in the provision of facilities or services under such arrangements as are mentioned in section 2(3) of the Enterprise and New Towns (Scotland) Act 1990 (arrangements analogous to arrangements in pursuance of section 2 of the said Act of 1973).".'—[Mr. Lang.]

Clause 17

DELEGATION OF CERTAIN FUNCTIONS AND POWERS

Amendments made: No. 16, in page 17, line 10, after 'below', insert
'and to section (Monitoring of training for employment) of this Act'.
No. 17, in page 17, line I I, leave out 'of this Act' and insert 'thereof'.—[Mr. Lange.]

Mr. Kirkwood: I beg to move amendment No. 29, in page 17, line 13, leave out


'may be agreed between it and that person' and insert 'the Secretary of State may by order made by Statutory instrument provide'.

Mr. Speaker: With this it will be convenient to consider Government amendments Nos. 18 and 30.

Mr. Kirkwood: I wish to detain the House further, essentially on a constituency basis. I did not have the opportunity earlier to make a contribution to the Bill, which will have a significant effect in my constituency and in the borders of Scotland. The amendment is intended to set out the delegation powers that would be subject to parliamentary approval through a statutory instrument, which would have to pass both Houses. Clause 17, as unamended, would allow Scottish Enterprise and Highlands and Islands Enterprise to delegate functions and powers to others, except powers such as the compulsory acquisition of and entry to land, and the power to obtain information.
The amendment is a probing amendment. I want to see whether there is any scope for persuading the Government, before the companies take effect, to publish the set-up contracts between the Government and the local enterprise companies and to put them into the form of an Order in Council or a statutory instrument, which would be subject to the affirmative resolution procedure in both Houses. That would have the effect of allowing the House to consider in some detail the set-up terms for the local enterprise companies. A number of issues should be addressed in that procedure and in the statutory instruments, if the Government accept the amendment.
I do not ask—I hope that the drafting of the amendment is not defective in this respect—that every working contract entered into by local enterprise companies be subject to parliamentary scrutiny. That would take us back to a position far worse than the old nationalisation days. I seek to set out a procedure that would allow Parliament to scrutinise the original terms of reference within which the local enterprise companies operate as they are individually created.
There are compelling reasons for considering that proposal. The contracts should set out the terms under which the local enterprise companies will be accountable to the House of Commons and to the communities they seek to serve. The statutory instrument procedure, which I advocate in the amendment, would allow Members of Parliament to raise issues relating to particular local enterprise companies. In the debate on amendment No. 28, I adverted to some important aspects of the provisions affecting the Borders local enterprise company. I am also concerned with specific training functions. It might be possible, for example, to investigate the lack of a tourist remit for some of the other important local enterprise companies that may be set up.
I say that with more force in light of a recent survey into tourism training. It examined the position throughout Scotland and came to the conclusion that neither the quantity nor the quality of training in the tourism industry achieved a high standard of performance because of a combination of low demand from employers, a poor perception of tourism careers and the supply-driven nature of the existing provision of training. That is an example of

an issue that we could examine through the statutory instrument setting up the individual local enterprise companies.
I should very much like to be able to scrutinise any provisions made in my local Borders LEC for rural areas. We heard the arguments about the possibility of a social obligation when we discussed amendment No. 28 and that is an important consideration, although that argument is now over. We should also want to consider the small business provision, for example, to ensure that the local enterprise companies embrace the needs of small businesses. Although I make no complaint about it, there is a feeling in my area that small businesses will not be properly represented in the constitution of the prospective board for the company that will run the Borders local enterprise company. We cannot ignore the proper concerns of small businesses, especially in rural areas. Scrutiny of such issues would be possible if we had the statutory instrument procedure.
10.30 pm
There is also the question of the amount of finance that is available to local enterprise companies. As far as I am aware, the amount of taxpayers' money in the pot is not subject to any direct or explicit questioning under the Bill as it stands. That is lamentable. I am not saying that that money will not be properly applied, but the House deserves the statutory right of scrutiny over the financial arrangements that are made by and the finances that are deployed by the local enterprise companies in the future.
The question focuses on how individual LECs are to be made accountable to their local communities. When the Bill is enacted, the Lowland LECs will have between £5 million and £70 million of taxpayers' money to deploy; and the highlands and islands area will have between £1 million and £5 million. We are talking about substantial sums of money. The House has the right to demand some machinery to scrutinise the details of how the money is spent. That could be achieved by the statutory instrument procedure.
We had an interesting debate earlier about the quality of training, which could be dealt with by setting up a system of parliamentary scrutiny. We require guarantees about a proper quality of training before the LECs have any chance of succeeding in performing the tasks for which they are being set up.
The statutory instruments that I am advocating could also relate to details of how LECs will be given the opportunity to earn additional funding. I was not a member of the Standing Committee and some of these matters may have been discussed in detail then, but I am worried about the prospect of the operation of performance bonuses. I have heard of a civil service discussion document suggesting that almost £6 million—nearly 2 per cent. of the current budget of the Training Agency's programmes in Scotland—should be spent on performance bonuses for LECs that exceed the stipulated minimum training targets. That was reported in Scotland on Sunday on 25 March 1990.
I apologise for repeating this point if the Minister dealt with it in Committee, but the House will want to know about it, because it is a basic point. As I understand it, the basis for some of the performance targets will be competition between LECs based on their efficiency to process people through YTS and ET schemes. The performance measures that are being talked about are


based on percentages of, for example, leavers of YTS and ET schemes who find jobs, go on to further education or become self-employed, or who achieve certain qualifications and credits towards those schemes. Some of those matters deserve further consideration and are the sort of thing that can be dealt with in a statutory instrument procedure.
Performance monitoring is a desirable concept, and I wonder why the Government did not look more closely at the scheme that was suggested by Community Business Scotland, which suggested in its original submission on the White Paper that monitoring could cover more broadly based factors such as the overall impact of the LEC; the quality of the board of directors; the LEC's breadth of coverage—especially in poorer areas—the extent to which there is a genuine partnership among the public, private and community sectors; the quality of the training provision; and the management of innovation.
The House needs further to consider the ability of the LECs to render themselves accountable to the communities that they serve. Some of the quotations that I have seen from Mr. Bill Hughes and Mr. Lex Gold are simply not good enough. They suggest that, as long as they are as accountable as the best private companies, that is good enough. I do not agree. I hope that the Minister will assure us that the House will have an opportunity to consider that before LECs are set up.
People in my area are worried that parts of the Bill will subvert the democratic planning permission process, as LECs will effectively be able to submit directly to the Secretary of State for approval proposals for development, redevelopment or improvement anywhere within their jurisdiction. I should be grateful if the Minister could bring me up to date on any development in that regard, if there have been any, since the matter was discussed in Committee.
The machinery that I have described may not be the best, but the House is entitled to better guidance from the Government about the legal terms in which powers devolved to LECs are couched. If none is forthcoming before LECs come into effect, the Government will be doing the House a great disservice and short-changing it in an important area of public policy that will have a dramatic effect in every constituency.

Mr. John Home Robertson: The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said that the objective of the amendment is greater local accountability for LECs. I am sure that we all applaud that aim, but requiring guidelines for the work of LECs to be put to a Committee on Statutory Instruments is a funny way in which to achieve it.
I realise that this is a probing amendment, but what the hon. Member for Roxburgh and Berwickshire said about it and in the previous debate was entirely fair. There is a clear need for local considerations to be the driving force behind decisions on the development of training and enterprise in local areas. That is especially true of rural areas such as those that the hon. Gentleman and I represent.
One of the things that has been wrong with the work of the Scottish Development Agency recently is that so many decisions that would once have been devolved through the SDA seem to have been required to go across the Minister's desk. I have had some local cause for concern on that count recently in regard to the painful amount of

time it has taken to process applications for assistance from the SDA for the valuable work of the Dunbar initiative, which is a joint operation involving private enterprise, local authorities and the whole local community, which want to redevelop a rural part of my constituency that has suffered considerably from a range of problems that I shall not go into.
I take this opportunity to thank the Minister in advance. I am advised that the SDA is likely to make a fairly substantial contribution to the project, but we could do without central decision-making. We want to get such decisions off Minister's desks and into the forum of local decision-making. I think that that is what the hon. Member for Roxburgh and Berwickshire wants. We want LECs to be genuinely locally accountable.

Mr. Lang: I shall have to disappoint the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), because I cannot accept his amendment. I hope that he will forgive me for being brief, because of the hour, in my explanation of the thrust behind what we are seeking to do. We want to decentralise power, through Scottish Enterprise and Highlands and Islands Enterprise, to the local enterprise bodies.
The hon. Member for East Lothian (Mr. Home Robertson) put his finger on it when he said that the amendment runs counter to such an aim, as it would bring to the House, on the annual scrutiny basis, detailed accountability of the expenditure and budgets of LECs. There is also the practical point that it would be difficult to debate 22 different affirmative orders each year Each would have to be debated separately, because each contract would be different. Whether he acknowledges this or not, that is what the hon. Member for Roxburgh and Berwickshire is calling for. The provisions of the amendment would be counter to our philosophy of decentralisation.
I accept that the scrutiny of expenditure is important. The structure that we are setting up, in which LECs contract with Scottish Enterprise, and have their contracts carefully monitored, will create greater accountability than exists through the SDA.
It is important to have performance targets and to reward the successful delivery of performance, but it is important to go for quality, not just quantity, and for that reason, the performance targets will embody a recognition of qualifications gained and of jobs secured. It will reward success.
It is our purpose that LECs should be answerable to the community. I shall send the hon. Gentleman copies of chapters 6 and 7 of the handbook for LECs, which sets out clearly the accountability procedures that we envisage operating. I think that that will answer his point.
I shall write to the hon. Member for East Lothian about the Dunbar initiative, to bring him up to date, and I am grateful to him for raising the subject.
For the reasons that I have given, I hope that the hon. Member for Roxburgh and Berwickshire will not press the amendment.

Amendment negatived.

Amendment made: No. 18, in page 17, line 15, at end insert
'and may (under section 7(1) of this Act) transfer 'JD the person such of its property as it considers appropriate on such terms as may be so agreed.'.—[Mr. Lang.]

Clause 33

INTERPRETATION

Amendments made: No. 19, in page 26, line 45, leave out 'has the meaning' and insert
'and 'wholly owned subsidiary' have the meanings'.

No. 20, in page 27, line 4, at end insert 'and'.

No. 21, in page 27, line 6, leave out from 'Act' to end of line 8.—[Mr. Lang.]

Schedule 1

CONSTITUTION AND PROCEEDINGS ETC. OF SCOTTISH
ENTERPRISE AND HIGHLANDS AND ISLANDS ENTERPRISE

Amendments made: No. 22, in page 29, line 24, after 'State', insert
'(regard being had to the principle that equality of opportunity should be promoted as between men and women)'.
No. 23, in page 29, line 30, after 'State' insert
'(regard being had to the principle mentioned in paragraph 5(a) above)'.—[Mr. Lang.]

Schedule 3

TRANSITIONAL PROVISIONS AND SAVINGS

Amendments made: No. 24, in page 37, line 45, leave out 'subsection (2)(c)' and insert
'paragraph (c) of subsection (2)'.

No. 25, in page 37, line 48, after land)', insert
'and that paragraph (a) of the said subsection (2) shall be disregarded'.
No. 26, in page 38, line 4, leave out 'paragraph' and insert 'paragraphs (a) and'.

Schedule 4

MINOR AND CONSEQUENTIAL AMENDMENTS

Amendment made: No. 27, in page 43, line 26, at end insert—

'Employment Act 1989 (c. 38.)

18. In Section 8(1) of the Employment Act 1989 (power to exempt discrimination in favour of lone parents in connection with training)—

(a) in paragraph (a), after the word `training)' there shall be inserted the words "or under section 2(3) of the Enterprise and New Towns (Scotland) Act 1990 (arrangements by Scottish Enterprise and Highlands and Islands Enterprise in connection with training etc.);" and
(b) in paragraph (b), for the words "that section" there shall be substituted the words "either of those sections".'.—[Mr. Lang.]

Motion made, That the Bill be now read the Third time.

[Queen's Consent, on behalf of the Crown, signified.]

Question put forthwith and agreed to.

Bill accordingly read the Third time, and passed.

Automobile Industry

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. John Redwood): I beg to move,
That this House takes note of European Community Document No. 10971/89, relating to the Community motor vehicle market; and supports the Government's view that it provides a useful framework for considering the detailed measures which will have to be implemented in the Community to bring about a Single Market in the vehicle sector.
The document before us says that the principle of free trade is at the heart of EC policy on motor vehicles. I hope that the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) will welcome that, along with the other points that he welcomes about which I have already read in his press release. We seem to be in some agreement on the need to stand up for those Japanese motor manufacturers which have come to Britain to invest and are now European motor manufacturers. Some member states are unfairly biased against Japanese car manufacturers. The British Government strongly welcome them into the United Kingdom. They are Community-based assemblers, and should enjoy all the benefits of access to the open market of the 12 member states. Indeed, they are entitled to such access under the treaty of Rome.
There is no difference between a Japanese motor car company in the United Kingdom, a United States company in Germany or a Swedish company in France. We do not call Peugeot in the United Kingdom a transplant, and nor should we call Toyota a transplant; it would be pejorative. They are good European-based motor manufacturers.
We must ensure that European Community policy is based upon competition and not upon Euro-champions. There is plenty of evidence that the most successful export industries around the world have been based on strong domestic competition. The Japanese motor industry, for example, which has been most successful, has five major companies with many other smaller competitive businesses as suppliers. The same is true of the British pharmaceutical industry and the German chemical industry, which are major exporters which also thrive with a multiplicity of companies.
The Community document expresses some worries about some aspects of competition and seems to be worried about the superiority of the Japanese motor assemblers in some respects. That is why Britain is keen to welcome them into the United Kingdom so that there can be cross-fertilisation between the domestic industry and Japanese investors, because both parties have things to offer and we can learn from each other.
Japanese design times, for example, for new models are up to a third shorter than for some European manufacturers. I saw that for myself when cutting the ground for the new Nissan design centre at Cranfield earlier this week. Such investments expose how dangerous were the errors of those critics—some of whom were Opposition Members, but I notice that they are not present tonight—who said that Japanese investors here would only set up screwdriver operations. I think that has been well and truly knocked on the head by the commitment of the Japanese manufacturers to research and development and to design in this country.
The fortunes of the British motor industry show perfectly the difference in styles and therefore the results between the bad interventionist policies of the 1970s and the more recent open-market policies followed in the 1980s and 1990s.
Between 1974 and 1979, import penetration into this country doubled from 27·9 per cent. to 56·3 per cent. of the market. Import penetration has stabilised in the 1980s and is now destined to fall. Between 1974 and 1979, United Kingdom car production fell by 30 per cent. Between 1979 and 1989 it rose by more than 20 per cent. In the period from 1975 to its successful privatisation, Austin Rover lost £2·75 billion. Now that it is in the private sector, it is competitive and profitable.
From the bottom point of 900,000 vehicles a year produced in this country in 1982, we have now reached 1·3 million a year and we are on target to reach approximately 2 million, as forecast by the Society of Motor Manufacturers and Traders, at some point in the 1990s.
The progress is not just based upon the welcome investments from Japan. In 1978, for example, Ford sold 392,000 vehicles in the United Kingdom and made profits of £242 million. In 1988 it sold 583,000 and made profits of £673 million. Similarly, Vauxhall UK sold 261,000 vehicles worldwide in 1968, with profits of £1·6 In 1988 it sold 353,000 vehicles, with profits of £152 million, and has produced most welcome results today showing a further large increase last year to profits of £236 million. The figures speak for themselves about the profitable progress, new investment and increased output being achieved by many motor manufacturers in the United Kingdom, both the domestic and earlier inward investors, as well as the new inward investors, which we welcome.

Mr. Roger King: Does my hon. Friend agree that one of the spin-offs of the enormous increase in productive capacity within the United Kingdom is the inward investment of component manufacturers coming to this country and the expansion of our indigenous components manufacturers? In my constituency several European, Japanese and American companies are coming in to set up businesses to produce components to an ever-higher standard, which can only be good news.

Mr. Redwood: My hon. Friend is quite right. There are many inward investments and domestic investments in related sectors. We expect to see that increase. We are looking at a major manufacturing revival based upon motor car assembly and the attendant activities which congregate around successful manufacturing plants.

Mr. Teddy Taylor: In view of that news and the further good news that the Minister has given, could he tell us before he sits down what is the balance of payments in the car trade with the EC?

Mr. Redwood: We have an adverse balance of payments in motor cars with the EEC. I do not have in mind the exact figures, but we have been importing considerably more in recent years than we have been exporting. I suggest that the increase in output and production that we are forecasting, and to which external forecasters are pointing, will make a great difference to that trade balance over the next few years. That will mean either import substitution in the domestic market or more exports from the United Kingdom. The Government are determined


that all the manufacturers in the United Kingdom should be able to export fairly into the European market as well as the world market.
General Motors has recently announced a £160 million new engine plant at Ellesmere Port. Honda is to spend another £300 million on its engine plant at Swindon. It will be producing 100,000 cars a year by 1994. Nissan is already making 75,000 cars a year, and will more than double that output by 1993. Toyota is investing £800 million in car production facilities to make 200,000 cars a year. This week Rover announced 1,200 extra jobs at Longbridge to expand the production of its successful new models.

Mr. Hugh Dykes: Bearing in mind the difficulties of recovery and of building up the industry in Britain, will my hon. Friend give us the figures for motor vehicle production in Germany and in Britain at this moment?

Mr. Redwood: I do not have those figures at the forefront of my mind. German motor production is a great strength within German industry, and it has been especially successful at exporting throughout the world, including the European Community.
The burden of my case is that we are well past the worst in the motor industry. Our industry had a terrible time during the 1970s, partly because of the policies pursued by the Labour Government. They threw money at the wrong causes and intervened to no good effect whatsoever. The policies of the 1980s and 1990s which have been pursued by this Government have encouraged the open market in Europe for motor vehicles, inward investment into the United Kingdom, and fair trade terms for our motor assemblers. They have transformed the picture, with the result that Britain is now the preferred location, even when compared with Germany, for many important investments. They are coming here because productivity, profits and enterprise are all thriving. The 1990s will be the decade of manufacturing revival in the United Kingdom. That will be based firmly and squarely on the motor car industry revival and all the attendant industries to which my hon. Friend the Member for Birmingham, Northfield (Mr. King) has referred.
I am sure that my hon. Friends will agree that the fact that Germany has been successful with some industries and has performed well in export markets in the 1980s does not mean that Britain is doing so badly. It does not mean either that we are unable to compete and prosper in the 1990s. I strongly believe that we shall be able to to so. On the basis of the policies that have been identified with our Community partners and the policies that are being pursued in Britain to back enterprise and success, I look forward to great success in the 1990s for the British motor industry.

Several hon. Members: rose——

Madam Deputy Speaker (Miss Betty Boothroyd): Order. I inform the House that Mr. Speaker has not selected either of the amendments.

Mr. Doug Henderson: I welcome the opportunity to debate the EEC's consultative proposals on the future of the motor vehicle market. Many reservations have been expressed in the past about the inadequacy of the way in which we deal with documentation such as that which is before us today. I urge the Government to report to the House on any final position which might be presented by the Government to the Council of Ministers on these matters. I ask the Government to accept that they should seek the House's approval of any final agreement on which future European legislation might be based. It would be more helpful if we had some mechanism, such as a European Grand Committee, to deal with legislation of this sort. Such a Committee could make an important contribution without having exclusive rights.

Mr. William Cash: Is the hon. Gentleman aware that the Select Committee on Procedure has produced an excellent report that would take the House back into an earlier stage in the making of legislation? I speak as a member of the Select Committee on European Legislation when I say that we are increasingly concerned that the report was produced several months ago and that the European Community is moving apace in many extremely dangerous and difficult areas. The report should be considered, debated and decided upon in the House as quickly as possible.

Mr. Henderson: I do not disagree with the hon. Gentleman. I am sure that the business managers will consider those matters in the not too distant future.
The Opposition acknowledge that the Commission's communication is a useful framework for consideration of measures on the introduction of a single market for motor vehicles in Europe. The document covers many important issues, of which the most controversial and pressing, as the Minister said, is a common commercial policy, or what people in the country might understand as a trade policy.
Currently, we are a long way from free trade in automotive products, although the Minister argued that we have moved in that direction in recent years. Japanese and other foreign vehicles are subject to trade regulation by quota in many EC countries. The tough regimes of French and Italians are well known as the tough and, to some extent, partisan purchasing policies of their public and quasi-public institutions. The German market is more open to imports from outside the EEC, but that is based on historic strength and advantage, which was alluded to earlier by the hon. Member for Harrow, East (Mr. Dykes).
The United Kingdom market has suffered considerable penetration in vehicles and components from other EC countries and from Japan, although Japanese importers have been subject to controls.
In the long term, freer trade in vehicles world wide will not be achieved so long as there are great imbalances in the trade balances of the major producers and consumers of products such as cars. That fact is recognised by Japanese manufacturers. Pressures will inevitably lead to some protectionism, either overtly with quotas or tariffs or covertly through the purchasing policies of state organisations or other private-sector organisations over which the state has influence. Stability will be achieved only if regulation minimises the fluctuations in trading accounts. Regulation can allow each of the car-consuming


countries a share of the action in supplying their home markets and other third-party markets which do not have a car industry and depend on imports.
The EC must aim to free as many restrictions as possible on the importation of vehicles, but that will depend on whether the trade balance remains if not broadly in balance in the long term at least broadly stable. Periodic review will be a feature of future trade policy. External quotas, preferably voluntary, may be required from time to time.

Mrs. Edwina Currie: So that my constituents who will be working for Toyota understand exactly what the Labour party proposes, when the hon. Gentleman says that external quotas will be needed in the future is he saying that he would support my constituents' home-made vehicles being subject to such quotas into any country in the world?

Mr. Henderson: I am not suggesting that for a moment. I shall deal with that point. I was attempting to establish that negotiations with other car producers will be necessary on the extent to which the EC market can be penetrated by vehicles manufactured outside the EC.
The second important issue in relation to trade—this relates to the point that the hon. Member for Derbyshire, South (Mrs. Currie) made—is whether individual countries' quotas on Japanese imports should be retained. The document acknowledges that there will have to be a transitional arrangement. I recognise and understand that, but 1992 is a process and not a deadline. Policies must allow for stable growth of the Community-wide car industry. The Community must negotiate an agreement with Japanese manufacturers to prevent the EC market from being flooded with a surge of Japanese-made cars. Under the rules of the general agreement on tariffs and trade, there must be an effective safeguard clause which can apply to those products.
The future of the British industry is inextricably linked to the future of Japanese-owned investors in the United Kingdom, such as Nissan and Toyota, and of joint venture companies such as BAe-Rover-Honda. All those cars are British cars. Nissan cars already have a higher British content than some of the models made by other manufacturers, such as the General Motors' Vauxhall group. United States companies such as General Motors and Ford locate in Germany because they believe that the central European location is a telling factor. Japanese companies are increasingly encouraged to locate in the United Kingdom because, among other factors, of the English language and the reasonable geographical location of potential plants such as Toyota in Derby and the Nissan plant in Sunderland. The locations are reasonable in terms of transportation, at least by sea to Europe, if not by rail, and action on the Channel tunnel would be an additional attraction to companies to locate in Britain.
The vehicles produced at Sunderland are north-eastern cars. At Longbridge, they are west midlands cars. The vehicles that will be produced at Derby will be east midlands cars. They must not count as part of any EC-imposed quota during a transitional period or beyond. If Britain loses this argument, Japanese companies would no longer have the same incentive to locate in the United Kingdom, and without Japanese investment the future of the United Kingdom car industry is bleak.
It is totally unacceptable to the Labour party that those cars should be included in any Japanese quota. We cannot allow the European Commission or other European Governments to ride roughshod over British interests in this matter.

Mr. Teddy Taylor: Although the hon. Gentleman, like my hon. Friend the Minister, says that it is totally unacceptable for such a thing to happen, what would be a Labour Government's policy if the Council of Ministers agreed by majority vote on such restrictions on British cars going to the continent for a transitional period of three or four years?

Mr. Henderson: I am grateful to the hon. Gentleman for raising that point. I was about to come to that, if he will bear with me. It is important first to point out that the Government must remember that if we cannot defend Japanese investment we cannot defend our automotive industry. If we cannot defend that industry, like the director general of the CBI I believe that we cannot defend our manufacturing industry. If we cannot defend that industry, we cannot hope to maintain the balance of trade in the long term. These matters must be considered in that context.

Mr. Roy Beggs: Would the hon. Member go further and say that we could no longer justify being in Europe?

Mr. Henderson: I will not say that. I will move on to the point raised by the hon. Member for Southend, East (Mr. Taylor). The Government must take a firmer stance.

Mr. Teddy Taylor: What does that mean?

Mr. Henderson: Too often in the past the Government have pretended that they have had no option in Europe other than to be those who hold the jackets. The Minister said that the Government intend to be firm and resolute in negotiations in Brussels, and I welcome that. I hope that their actions will be consistent with the words that have been spoken in the Chamber this evening. The key factor, which relates particularly to the point raised by the hon. Member for Southend, East, is how the Government can make sure that they can deliver a reasonable deal for the United Kingdom in those negotiations.
Those in Europe are under no illusion how a British Government can do that. European manufacturing industry, particularly the car industry, is broadly divided between the northern producers, such as the Germans and the Dutch, and the southern producers who have more protectionist regimes, such as the French, the Italians and the Spanish. The balance of power in any of those talks will lie with the British Government, who are in a clear position to deliver on this matter. They can either make noises to try to reach agreement with the northern countries and carry a majority in that way or reach agreement with the southern countries. The Government have the power to act in this matter and I urge them to use it.

Mr. Cash: The hon. Gentleman talks as though the single market is a market among countries when the truth is that it is a market among companies. With a 70 per cent. trade surplus with West Germany—a 36 per cent. trade deficit against the United Kingdom—and the difficulties that the Seat employees and management are experiencing as against the Volkswagen management and work force


combined with their enthusiasm for the social charter in Dusseldorf, does the hon. Gentleman really believe what he has just said?

Mr. Henderson: That is a rather convoluted way of putting it, although I think that I get the hon. Gentleman's drift.
The hon. Member for Southend, East asked what we would do if a majority decision went against the British. The central point is that there is no reason why a majority decision should go against the British because on this matter the British Government are in a position to carry a majority of opinion in Europe. The name of the game is to achieve a deal which can carry a majority in Europe and at the same time protect British interests.

Mr. Cash: Absolute rubbish.

Mr. Henderson: The hon. Gentleman may think that that is not possible, but I believe that it is possible and that a resolute British Government can ensure in negotiation that a deal is struck. I am not about to tell the House what deal a Labour Government would place on the table. If the hon. Member for Southend, East and others wish to come back in a few months' time, the situation may have changed and they may be fortunate enough to be sitting on the Opposition Benches listening to a Labour Government's proposals.
If negotiations do not lead to a satisfactory conclusion for manufacturing in the United Kingdom, and if the British car industry is left exposed or sold short, the Government must shoulder the responsibility. They have the power to act and they should use that power in the interests of the industry located in the United Kingdom and the jobs and the cars that are manufactured.
Many other important matters are dealt with in the documents before us. I am mindful of the time, and I know that a number of hon. Members will wish to speak, but it is important at least to mention some of those matters, especially as I have been fairly generous in giving way.

Mr. Redwood: Will the hon. Gentleman give way?

Mr. Henderson: Now I shall be even more generous.

Mr. Redwood: The hon. Gentleman has been very generous. Hon. Members would like to make sure that they have understood what the Labour party is recommending in the event of the negotiations going wrong. What steps should the Government take?

Mr. Henderson: I should have hoped that the Minister would be sufficiently confident to ensure that negotiations will not go wrong. If he finds himself in difficulty, I shall be happy to have a private word with him, or to refer him to some of my hon. Friends who I am sure will be prepared to advise him.
Technical harmonisation is another important issue. There is clearly a need to achieve technical harmonisation to get the best practices adopted throughout the Community and give our industry a better chance to export to other EC countries. It is also important to introduce new cleaner emissions standards. The United Kingdom should be taking a lead on environmental standards if we hope to make spin-off gains in the

component industry and begin to take on the United States market with the export of our vehicles and vehicle components.
State aids will also come into the argument. I believe that they should be incorporated into a framework which allows the less advanced sections of the European industry to develop. Regulations must be drawn up that are consistent with regional policy objectives. I am tempted to raise the recent Scania application to the Department of Trade and Industry for information about state aids that might be available. However, the Minister and I have already had lengthy correspondence about that and in view of the time I will let that matter lie today.
Research and development is another crucial issue referred to in the document. It makes clear that Japanese companies already spend more on R and D than all the European volume producers put together. It comes as no surprise that those Japanese companies can develop a car in Japan in two thirds the time it takes a European-based manufacturer to develop the same product.
Improved competitiveness begins with research and development. Europe should start now and I disagree with the Government in that I believe that we should agree to support European initiatives, not at the expense of initiatives in this country but as an addition to those initiatives. We should try to encourage those in the industry using catalytic public expenditure where necessary—there are already some interesting experiments in that regard—to develop technical centres which can provide information and background to component manufacturers.
We should also consider training in this debate. Once again, however, I am mindful of the time. Suffice it to say that we do not do enough training either in general or in the car industry in particular. If we are to become competitive, we must invest more of our resources in training the people upon whom the industry will depend. The document also refers to taxation policy, but I do not believe that that will be resolved, particularly in relation to the car industry. That is a wider issue and no doubt the House will return to it on another occasion.
This debate is only the beginning of a process that will lead to a new shape in the European car industry. If Europe is to speak with a strong united voice, policies must be adopted which give maximum stability to the industry. Stability must not be used as a cover for inertia. Competitiveness must be raised by better design, engine efficiency, safety standards and technical harmonisation. More resources must be committed to research and development and to training. Japanese manufacturers must come to understand, as they probably do, that trade regulation is necessary to balance trade patterns and European manufacturers must come to understand that if the single market is to be meaningful the automotive industry cannot be exempt from its provisions.
Britain has a special interest in protecting its inward investors who make exportable products and create jobs. We must not flinch from that responsibility. Europe knows, the car industry knows and the British people know that 1992 is on the line. If a satisfactory agreement cannot be reached on the vehicle industry and the vehicle trade, the whole of 1992 will be called into question.

Mr. Teddy Taylor: The Minister has had a hard week and we appreciate his presence in the Chamber tonight. I know that he has a busy day tomorrow. However, I am sure that he will agree that it is an insult to the principles of democracy and to the hundreds and thousands of people whose jobs are dependent on the car industry that we should be debating this important plan for the future of Europe's car industry at this absurd hour.
Only a handful of hon. Members are present—fewer than 20. Sadly only two Labour Members are present and some of the minority parties are not represented at all, although as always we have splendid representation from the Ulster Unionist party whom we welcome. It is an outrage that these controversial plans which will fix the future of Europe's car industry should be debated at this absurd hour.
If we were debating the issue at this hour simply because of pressure on parliamentary time, we could understand it. However, there are gaps in the parliamentary programme next week that could have allowed us to debate the issue at a civilised hour. One almost suspects a deliberate ploy, as has happened so often before, to put controversial Euro-legislation into the anonymous late hours of the night at the end of the week.

Mr. Cash: Is my hon. Friend aware that this is the first time that we have considered any European legislation, with its impact on and importance for British industry and commerce, since late February?

Mr. Taylor: How right my hon. Friend is. I emphasise that I do not blame the Minister. I blame the Government business managers who know exactly what they are doing. They should be ashamed of themselves.
These Euro-plans are not meaningless political regulations. They are the basis of laws that will be imposed on the United Kingdom by majority vote, irrespective of the views of this Parliament. Every day we see how EEC laws affect us. Only today, Martin Galvin, a leading fund raiser for Noraid, who has been banned from Britain on grounds of security and public order for years, has had the ban lifted solely because he has somehow acquired Irish citizenship. There is nothing, it seems, that we can do about that, even though our Ministers and Government regard him as a threat to public order.
Trade in cars with Europe is, of course, vital for our balance of payments and for our jobs. Unfortunately, the Minister did not have the figures handy, but, from one of his own answers in the House of Commons, I can tell him that we had a deficit in trade in cars with the EEC last year amounting to £4·6 billion, with one of £3·1 million with Germany alone. In a nutshell, for every car that we exported to the EEC, we imported more than four in return.
I remind the Minister of another answer that he gave me just recently. Sadly, he pointed out that the deficit in trade in cars with Europe was equivalent to all our deficit.
He said:
In the first 11 months of 1989 the deficit in total visible trade was £4·6 billion. In the same period the deficit for manufactured goods was £4·7 billion."—[Official Report, 17 January 1990; Vol. 165, c. 308]
It is a serious issue which affects jobs. I hope that things will improve as the Minister says, but we have a trade disaster at present.
The creation of Japanese-owned factories in the United Kingdom to produce cars was our chance to reduce the deficit, to promote exports, to create jobs and to encourage further Japanese investment. "Come to the UK," he insisted, "and you can secure the access to the Common Market that you cannot secure from Japan because of EEC restrictions," but, sad to say, we may have conned them. The Euro-plan provides for the possibility of restriction on British cars produced by British workers in those plants for what is called a transitional period. But it would appear that the proposals are unlawful, discriminatory and acutely damaging to the United Kingdom and its investments. We must learn from the Government what they will do if such restrictions are imposed by majority vote.
That question was put by the spokesman for the Labour party, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson)—I wish that we had this debate at a civilised hour so that the people outside the House could hear it—but the Minister did not want to answer. He hoped that things would work out satisfactorily. If the Government worked hard they could solve the problem. But from sad experience we know that, by majority vote, there is a likelihood that there will be restrictions on British cars produced from Britain by British workers. The people of Britain have to know from the Government what on earth they will do if that happens. I should love to know, as labour is now ahead in the polls, what a Labour Government would do. That is something that we are entitled to know. We are not talking about silly Euro-ploys; we are talking about British jobs and about the possibility of attracting Japanese investment.
Much as we respect the Minister, if he does nothing else tonight, will he please tell us what we do if the restrictions are imposed by majority vote? Will we just protest, will we waste time by going to the Euro-court, will we simply go down fighting, or will we retaliate against specified European producers? If we cannot get a simple answer to those questions tonight, we are wasting our time in Parliament.
The plan also proposes strict controls on the import of cars from Japan. A Euro-quota or possibly national quotas extended by means of a voluntary restraint agreement are proposed. Once again, Britain will be the loser. We restrict Japanese imports to about 11 per cent. a year. Italy and Spain permit about 3 per cent. If those basic controls are permitted to continue on a national level in 1992, 1993 and beyond, once again Britain will lose out.
Such restrictions will be welcome in Brussels, where the staff always favour more protectionism. But in relation to our duties under GATT, we cannot ignore the fact that while we levy an import duty of 10 per cent. on Japanese cars, they have no import levy on British cars or Euro cars.
The next plan is to harmonise VAT on cars in the EEC. That of itself will not promote free trade, because all cars are subject to the same VAT in every member state, although the rates vary. There is no question of VAT being charged at different levels for home or foreign-produced cars. The whole issue is bound up with the EEC's obsession with harmonisation and with usurping the powers of national Governments on taxation.
I remind the Minister yet again that the Single European Act passed through the House late on a Thursday night. Indeed, the debate went right through the Thursday night and into the Friday. The whole thing was an acute embarrassment to the Government because we


debated it at a time when nobody knew what was going on. During that debate the House was given the specific assurance that changes in taxation and the harmonisation of taxation were subject to unanimity. Our veto, we were told, was firmly entrenched in the legislation.
Sadly, that is not the case, for the legislation says that we are committed to the harmonisation of VAT in so far as that is necessary to complete the internal market by 1992. The Minister will be aware from his contacts and the views of the members of the Commission that if we do not complete it by 1992, they believe that other measures can be taken.
Does the veto extend to these VAT proposals, which the Commission has described as being in advance of single market harmonisation? If the aim of the plan were free trade, I would rejoice. But free trade in the Common Market is a distant vision. Even those laws that have been passed have not been applied uniformly, and I have given the Minister examples from within his Department covering these issues.
The plans of the EEC, as set out in the document before the House, clearly discriminate against the United Kingdom. They will damage overseas investors whom we have tempted here with subsidies and promises. They will entrench the existing protectionism of the EEC. The Council of Ministers will make up its mind and this Parliament will have no say in the matter. What is decided there will be forced on us.
Even so, we can still ask questions. I have set out three simple, basic questions to which we are entitled to answers. EEC membership has played its part, as many of us knew it would, in undermining and partially destroying our manufacturing industry, and that process is still proceeding. Now our car industry will face the music of Brussels. Bearing in mind that hundreds of thousands of British families depend on the car industry for their jobs, income and livelihood—[Interruption.]
My hon. Friend the Member for Harrow, East (Mr. Dykes) may laugh, but he should realise that the appalling deficit in trade with the EEC is destroying jobs in Britain and is harming our prosperity and living standards. There may be other reasons, too. Perhaps they include our folly and the fact that we do not respond. All that is making the lives and living standards of the British people less secure.
If the proposed policy is to proceed, we must have answers to the three questions that I have posed. If we get them, at least we shall have served some purpose by this debate. In no sense do I criticise the Minister. He is part of a Government Department. But irrespective of the part that he and others play in the affairs of government, it is time that the British people were told what lies ahead.

Sir Russell Johnston: If the British public do not know the views of the hon. Member for Southend, East (Mr. Taylor) by now, they must be stone deaf. He has repeated them often enough and, in my view, has remained consistently wrong for most of his political life.
Although the hon. Gentleman, at the beginning of his remarks, endeavoured to convey the impression that I was not here, I agree with him in what he said about the timing of debates such as this. They always seem to occur late at

night. Even so, one is bound in the end to accept that if hon. Members are anxious to be here, even late at night—witness the abortion debate earlier in the week—they will come. That reflects not only the decisions of Government managers, but the mood of the House and Parliament's wish to debate certain issues at certain times.
The Minister said that the Government wished to encourage an open European market in motor vehicles; the hon. Member for Southend, East inveighed against all the disadvantages imposed on us by the Community. Will the Minister explain why British mortorists pay up to 93 per cent. more than those in other Community countries for some new cars? I dare say that he saw an article in the Observer on 4 March, which went into the matter in some detail.
The hon. Member for Derbyshire, South (Mrs. Currie) said earlier that she did not want her constituents who work for Toyota to be subject to prejudice. She is quite right.
I feel the same about my constituents in Inverness. Why should they pay £7,145 for a Toyota Corolla here when the price in Greece is only £3,788? The consumer has not been mentioned much tonight, but the consumer is very important, and in my view he is being swindled. A Nissan costs £7,944 in Britain and £4,440 in Denmark. Even the Metro—our own product—costs £6,109 in Britain and £4,041 in France. This is not a new argument, but I have never heard an adequate explanation. Why should a Fiat cost £5,000 in Britain and £3,000 in Holland?

Mr. Dykes: I agree with the hon. Gentleman: it is a grotesque national scandal which has never been properly explained. Is it not even worse that wages and salaries tend to be higher in the other countries that he mentioned, apart from Greece?

Sir Russell Johnston: That is often the case. The article does not mention Germany, but certainly wages tend to be higher in France. Tonight we have a real and, despite the hour, relatively live Minister: perhaps he can explain the price differential.

Mr. Roger King: There is a good deal of confusion about relative prices in Europe. It depends whether consumers are buying the same specification of car in the respective markets. In Germany, many Mercedes Benz cars are simply taxis; in this country, because of the way in which they are sold and the equipment with which they are fitted, they sustain a much higher price.
The hon. Gentleman should not fall into the trap of supposing that the prices that have been listed are those at which the cars are bought. He quoted a price of £6,000 for a Metro in this country and one of £4,400 or so in France. That same Metro could be bought here for about £4,800, but the buyer would have to pay 10 per cent. in special tax which he would not pay in France. The hon. Gentleman must get his facts right.

Sir Russell Johnston: They are not my facts; they are The Observer's. A respectable newspaper says that they are correct, but, if they are not, the Minister can tell me so. The cars involved are identical models. I am not sure whether the 10 per cent. tax differential relates to Britain as against some individual Community members, or applies across the board. That 10 per cent. leaves another 83 per cent. in price difference to be accounted for.
British motor car salesmen often offer discounts. The discount price may not be the printed book price. One may therefore be able to negotiate a lower price. However, there is a considerable price differential between cars offered for sale in Britain and in other European Community countries. I should like to know why. The full reason cannot be the special import tax.
There was a considerable trade in parallel imports for a while. Most of the companies that engaged in that practice have gone out of business. The Observer article says that mostly it was due to
obstruction by manufacturers—sometimes apparently with the tacit consent of Government departments. Quadro Cars, of Southampton, one of the few remaining parallel dealers, claims that it faces continuing problems with Customs and the Department of Transport.
Mr. Chris O'Keefe, a director of Quadro Cars, said:
Most people have packed up this business because of hassle and administrative threats.
I thought that this open-market Government were all against hassle and administrative threats. I shall therefore be interested to hear about the Government's attitude to parallel imports.

11–31 pm

Mr. Hugh Dykes: This is an important debate about the future of the British and European automobile industry. I am grateful to the Chairman of the Select Committee on European Legislation for recommending that the subject should be debated. I am also grateful for the Government's response.
My hon. Friend the Under-Secretary of State for Industry and Corporate Affairs spoke skilfully for only nine minutes, whereas the Opposition spokesman, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), spoke for about 20 minutes but the substance of his speech was far less. Nevertheless, I was shocked that my hon. Friend did not know the approximate German motor car production figures, compared with the British figures. Perhaps he preferred to say nothing about them. The chilling reality is that the German figure is about 4·5 million and the British figure is about 1·5 million. That is lower than the Spanish motor car production figure, although Spain's population is only around 40 million.
All of us must hope that there will be a major recovery in the British motor car industry. It is a sad reflection that that will depend on the building up of foreign motor car production, with the arrival of the Japanese. We wish them well. We welcome worldwide competition and their entry into the British market and others. However, British motor car manufacturers ought to have done that.
The weakness of the British economy is very disturbing—writ large in terms of the motor car industry but also in terms of other sectors of British industry. We must unlock the mystery of that weakness before this country can ride high with the other three member states with similar populations that seem consistently to do better in the leading manufacturing sectors.
It was grotesque for my hon. Friend the Member for Southend, East (Mr. Taylor) to suggest that we have a unique motor car market and that the Commission ought not to impose restrictions on Japanese products. I agree that it depends on the contents of that manufacturing process being genuinely domestic, whatever its original provenance. However, my hon. Friend went on to say that although that is so important, there should be no indirect tax harmonisation, or VAT harmonisation in the internal

market. The two go together. There should be harmonisation and unification of the market in both those respects.
The continued weakness of the Government's stance is that they say that their main priority is the harmonisation of the internal market, except on indirect taxation. They say that that is unnecessary. The Commission has proposed harmonisation bands. I hope that eventually they will lead to one VAT rate, or to a couple of bands of harmonised rates for different kinds of products. The British Government should respond to that.
I express appreciation—if that is not too risky in political terms—of what the Liberal spokesman, the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston), said. I hope that my hon. Friend the Minister will have time to respond to his points and to mine. Let us consider Jaguar, for example, with all its boasting and hype about what a wonderful car it is now creating. I suppose that it is, because if we ride round in its cars, they seem to be agreeable motor vehicles, and they appeal to British executives and to some executives abroad. However, Jaguar produces only about 51,000 cars a year in comparison with Mercedes and BMW producing about 1·4 million expensive, luxury cars. That is a disturbing reflection of the relative weakness of the more expensive end of the British motor car industry.
The higher car prices in Britain compared with those in other countries are a scandal. Our economy is still truncated, despite a recovery in recent years and despite a lot of explanation from the Department of Trade and Industry about successes—some of which is, sad to say, a little exaggerated, but none the less welcome in so far as it can be based on statistics and facts. With a lower wage and salary structure in Britain in comparison with several leading continental countries—not all of them of course, because one excepts Greece from that—we see that car prices are fundamentally higher in this country than in other countries.

Mr. Cash: Will my hon. Friend give way?

Mr. Dykes: I do not know whether I have time. While I complete my next sentence, I shall reflect on whether I shall be generous enough to give way to my hon. Friend. Perhaps I shall in a moment. Time is short and these debates are always rather short.
The difference in prices is disturbing. The hon. Member for Inverness, Nairn and Lochaber was right to say that it has never been adequately explained by anybody, from the Government, to trade association spokesmen and individual dealers. No one has ever given us a proper explanation apart from saying "10 per cent. car tax" or that cars abroad may have different features, such a s leather seats.

Mr. Cash: Will my hon. Friend give way?

Mr. Dykes: Yes, because I am in a good mood.

Mr. Cash: I am grateful to my hon. Friend who is a member of the Select Committee on European Legislation. I am sure that, because he is a member of the Committee, he will know from the report that BMW, Mercedes and other luxury cars in West Germany benefit enormously from the deliberately low tax regime provided in the home market by the West German Government for the benefit of improving the advantages that BMW, Mercedes and other luxury cars have at the expense of Jaguar. I am sure that


my hon. Friend knows that, and I am sure that because he is such a fair person who wants a level playing field and because he is such a Europhile, he will accept that point.

Mr. Dykes: I agree with my hon. Friend on one point. It may not be a mistake in this country occasionally to look carefully at what our continental friends are doing with various industries and saying that perhaps we should emulate some of their techniques, practices and tax regimes. It is not a weakness or a heresy to say that we should follow some of the foreigners' advice. We could do that with considerable profit. I know that that is regarded as problematical, but it would be a good idea so I am grateful to my hon. Friend for that suggestion.
The difference in prices has not been properly explained. It needs to be, and the Government should institute a major inquiry into United Kingdom domestic car prices to satisfy the consumer. I am disappointed that my hon. Friend the Member for Southend, East did not regard this point as important; it is far more important than his point. The consumers in this country want justice on United Kingdom car prices. They want lower car prices commensurate with their wages and salaries, which are lower than those in France, Germany and even Italy now. They want explanations and they must come primarily from the British Government.

Mrs. Edwina Currie: I join other hon. Members in gently chiding the Government for not finding a better time and more time for this important debate. It is important for two reasons. First, the developing British car industry will provide many of the answers to the questions that right hon. and hon. Gentlemen have put already tonight about the state of our balance of trade and about the state of the balance of trade of the rest of Europe with the rest of the world. Secondly, I should like us to have more time—and perhaps we shall on a future occasion—because I should like to pin down the Labour party on precisely what its policy is on trade, on the car industry, on subsidies and, especially, on Europe. Labour Members should bear in mind for starters that if it had been up to the Labour party, we should not be in Europe and Toyota would certainly not have been anywhere near my constituency. I hope that it can overcome its fears about socialism and continue its support for capitalism in the years to come.
It is now exactly a year since Toyota announced that it would move to my constituency. The site is now being cleared and we are hoping that building will begin on the site in early June. In two years, Toyota will be recruiting my constituents. We are expecting about 1,700 jobs in the first tranche and that about 3,000 people will be directly employed a short time after that. Three years from now, the plant will be close to commercial production.
I should like to put on record the fact that I have been very impressed so far by the Toyota company; by its courtesy; the amount of information that it provides both to myself and to other local people, and by its efforts in planning applications and its presentation to all of us—to my constituents—about what it is trying to do and about the factory. Toyota has made tremendous efforts to

accommodate the worries and anxieties of local people and to change the plans in response to suggestions that have been made.
There is no doubt that Toyota is a very big spender. The budget for the Derbyshire site was announced as about £700 million, with another £100 million-plus for the engine site at Shotton in north Wales. There is no doubt that by the time the thing is up and running, Toyota will have spent over £1 billion sterling in investment in this country. That is not only the biggest inward investment that Britain has ever seen; it is the biggest inward investment that Europe has ever seen. It is one of the most significant events of recent years for this country.
We have a combination of Japanese money and Japanese expertise for a factory that is being built not in Japan, but in the heart of England. The work force will be British and we are hoping that the research and development will also be carried out locally. The suppliers will be British—indeed, many of them are already there. For example, Pirelli, down the road in Burton-on-Trent, is excited at the thought that it might be putting British-made, Italian-made tyres on those Japanese cars. There is no doubt sthat the cars that my constituents will be producing will be as British as Peugeot in Coventry; as British as Ford in Dagenham; as British as Nissan in Sunderland; as British as Volvo in several places in this country; as British as DAF and Iveco and as British as General Motors in Luton. In other words, the Toyota cars will be as British as Marks and Spencer, fish and chips and our weather, and it is about time that the rest of our colleagues in Europe recognised that and were keen to support a British—a European Community—industry of the highest level and standard that will show a clean pair of heels to the rest of the world.

Mr. Teddy Taylor: What if they do not?

Mrs. Currie: If my hon. Friend wants to intervene, I shall be glad to give way to him.

Mr. Taylor: What shall we do if they do not and if restrictions are placed on the superb cars that I am sure will be produced in my hon. Friend's constituency?

Mrs. Currie: Perhaps my hon. Friend will contain himself for two or three seconds because I shall tell him at the end of my remarks, which I should like to keep as short as possible.
It is a tremendous compliment to the people in Derbyshire that that factory will be established there. That is not because of some of the things to which the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) referred; it is because we have a first-class work force of militant moderates. They do not like to go on strike. They defied Arthur Scargill with great determination and are now ready to go on, in the same kind of sensible, moderate, intelligent, hard-working way to work in this new industry in our area.
We shall be major exporters to Europe and we shall make a huge contribution to the British balance of payments. We shall also knock the competition for six in the European car industry—and they know it. Here we have a contrast, which I ask my hon. Friend the Minister to support, between a privately owned and privately funded British business and the state-owned, state-subsidised inefficient car industry elsewhere in Europe, especially in France and Italy.
My hon. Friend the Minister—I believe that it was he—sent out a lovely little glossy document earlier this week, entitled "Britain in the Community: Europe in the 1990s"——

Mr. Redwood: indicated dissent.

Mrs. Currie: My hon. Friend is shaking his head; he will not accept responsibility for it. The very first sentence reads:
Europe is growing up. It's a challenging time to be a European. In every way, the barriers are coming down.
Amen to that.
I am a keen European, unlike my hon. Friend the Member for Southend, East (Mr. Taylor)—but not according to the document that we are discussing. I should not have minded if the "Single Community Motor-vehicle market" document had been a bargaining document to help to get Japan to open its doors to British and European trade, but it is not a bargaining document. It is clearly a document that is designed to protect a weak industry. Paragraph 1, entitled, "The Outlook for the Motor-Vehicle Sector", talks about "signs of fragility" among European car producers. That is absolute rubbish as far as the British contribution—even now—is concerned. Vigour and energy are much better signs than fragility, yet the word "fragility" appears several times in the document.
We get the truth about what is going on in paragraph 3.4 (b), which mentions
The growing scale of Community production of Japanese makes, which on top of present imports reduces the potential market share for older and less efficient factories.
At least the Commissioner has the grace to be honest about the tawdry business that he is up to. I think that it is an absolute, stinging disgrace. The document then says:
The Commission is determined to ensure"—
not, "The Commission would like to ensure"—
that Japanese vehicle exports do not grow to such an extent that they risk creating problems within the Community.
Frankly, I think that the Commission has got a nerve and that Commissioner Andriessen should be ashamed of himself. It is quite clear that somebody in the European Community has a fixation not about foreign makes or foreign marques, but about the Japanese. When one goes through the document line by line, one finds that West Germany is mentioned once, Korea is mentioned once, the United States is mentioned three times and Japan and the Japanese are mentioned no fewer than 23 times.
I have to say on behalf of all my constituents that I think that there is something particularly nasty and offensive about the Europan Community's objection to the Japanese and the way in which it seems to be trying to make special rules for Japan. It does not seem to feel that way about the Americans. In 1989, the European Commission approved a state loan of 98 million ecu—about £62 million—to Ford to build a factory in Portugal.
Despite the fact that so many Opposition Members' socialist friends are in the European Parliament, the European Community is not egalitarian about these things either. One of the other state loans to the car industry that was approved last year was for 28 million ecu—£18 million—to Ferrari, which no doubt will have a marginal effect on the pockets of next year's rather less-well-off Ferrari owners all over the world.
I would like, in the best possible tradition of the House having late-night debates, to chide my Front Bench for the

approach that it is adopting. It does not seem quite good enough to respond, as the Government do in paragraph 17 of their explanatory memorandum,
there is no question of the UK accepting any
such arrangement. The motion states that the document is
a useful framework for considering the detailed measures".
That is not good enough either. I know, and my hon. Friend the Minister knows, that the British Government have the right to go to the European Court. I hope that my hon. Friend will consider that as a possible measure, if necessary. Back British industry and make sure that my constituents and those of my right hon. and hon. Friends who are working in foreign investment businesses have the right to a free market in Europe in the future.

Mr. Roger King: I disagree with most hon. Members, who have said that this is not a relevant time at which to discuss the future of the British motor industry. Tens of thousands of people throughout the country are building cars in increasing numbers for the export and home markets. To some extent, therefore, we are showing solidarity with the large number of people now at work by debating the future of their industry in Europe.
Some hon. Members have spoken about car prices in Europe. Opening the European market will create a more open market in pricing. Until now, each European country has been considered as a separate profit centre, and the retail sector of the car industry has grown up differently in different parts of Europe. The British tend to part exchange cars, which involves extra overheads for retailers. The discount structure here is wholly different from that in France, for example.
Cars may be cheaper in some markets, but that may be the result of a proper marketing ploy by a manufacturer here. When seeking exports, a manufacturer may keep prices at a strong market level. It may be argued that one of the problems is the fact that the British industry is too keen to get business and reduces the price of its cars to make them more competitive with the indigenous product, but our export figures are hardly likely to grow if they do not adopt such measures.
We have discussed many aspects of the Community documents, and there is no doubt that the United Kingdom car industry has shown a dramatic upturn in profitability and output, as my hon. Friend the Minister said. By the year 2000, forecasters of the industry predict that annual output in the industry could be up by between 2·3 million and 2·7 million units a year. Looking even further ahead, some experts in the industry have predicted that in 15 to 20 years' time—not all that far away—we could be the third greatest car manufacturing nation outside the United States and Japan. In Europe, car manufacturing could be concentrated in Russia, Germany and the United Kingdom. There are tremendous opportunities for us to develop our industry as fast as we can.
The decision, recently announced by the Rover Group, together with its work force, to work towards a 24-hour production process on its engines and transmissions side is a clear sign that we have turned a corner. I lay the reason for this fairly and squarely on the Government's industrial relations policy and attitude over the past 10 years. We have overhauled our industrial relations, and no longer do the Red Robbos and the Moles of Cowley rule supreme.


The tendency to call a stoppage at a blow of a whistle decimated the profitability of our car industry, but those days are gone, and there is a new working relationship between the work force and management.
There are sometimes setbacks. For example, investment that was to be made in Dundee was recently cancelled and there have been problems at Bridgend in south Wales. Despite those setbacks, overall we hope that the British motor industry will develop substantially.
Our country's economic future is almost uniquely dependent on this industry. It is the one that can haul us out of our import-export difficulties. The rebirth of one our basic industries is nothing short of an economic miracle.
The Japanese factories that have come, and are coming here, have done so because they recognise that this is a splendid place to make cars, and one that offers them not just a skilled work force, or one that can be readily trained, as we have seen at Nissan's Greenfields site, but the component manufacturers to feed the companies that are set up, and valuable European engineering expertise for products that have been inherently Japanese.

Mr. Cash: It is so important for us to be entirely realistic about what is going on in the European Community as we get on towards 1992. Did not the recent experience of Ford pulling out of Bridgend have a lot to do with trade union practices and the tendency for people to pay themselves more than the worth of what they are producing? The British work force, both management and employees, will clearly have to address themselves to that if we are to maintain the position of the British motor industry in the way suggested by my hon. Friend, whose experience and knowledge of this industry I acknowledge.

Mr. King: I agree with my hon. Friend's sentiment, but Ford is not pulling out of Bridgend. It has decided that the final phase of the new Zeta engine installation will not go ahead, partly because the changing engine requirement means that older units produced there are needed for a few more years. The company therefore needs capacity elsewhere and has decided to go to Germany. That is disappointing. I agree with my hon. Friend that if the work force returns to its previous attitudes, the investment that we desperately need will not be made.
The European document highlights a number of technical standard changes and harmonisations that the British motor industry needs to take on board, and which will help our industry in Europe. Vehicle emissions must be standardised, although we can argue, as we have in previous debates, about whether exhaust catalysts are the right way forward, or whether improvements in engine technology are not the fundamental requirement in producing a cleaner, more fuel-efficient and economical car. Undoubtedly, however, we shall have to support the majority viewpoint that catalysts have a role to play for at least the next 10 years.
We also want to harmonise taxation on cars. I have already mentioned the 10 per cent. special tax in this country. One wonders whether it is the United Kingdom Government's intention to phase out that element of taxation, which in my view is excessive and is only placed upon automobilies in this country, so that we harmonise

the tax structure within the European motor industry. If that is the Government's intention, no one will welcome it more than I.
Dismantling internal barriers and encouraging the import of British-produced Japanese cars is the crux of the debate. Certainly, I support my hon. Friend the Under-Secretary of State when he tries to ensure that the Government get the best deal that they can. However, we are overlooking the fact that the document does not specify exactly what the transitional element comprises. It states that in some countries the importation of Japanese cars, whether they are made in a United Kingdom transplant factory or in Japan, is as low as 1·4 per cent. and in other countries it is as high as 44 per cent. I suggest that when the time comes to negotiate my hon. Friend or his colleague would be ready to hear what the transitional agreement could be. It could be exceedingly generous for the transplant factories if I may use that term, and by shuffling production and sales figures throughout Europe we may get by for two or three years quite successfully without bringing a hiatus to the Community. I do not know, but that is a subject for negotiation.
The new factories developing in the United Kingdom will not be up to full manufacturing capacity until the mid-1990s, so we have time to negotiate a workmanlike arrangement with the European Commission. We do not have to go in for a Mexican stand-off and have a high noon duel or shoot-out. A basis for negotiation exists. I think that the European Community will recognise that, given our balance of payment difficulties, we need this vital manufacturing capacity and we need to build up this vital investment and nothing must be done to jeopardise it.
It is not only the countries mentioned in the document which should concern us, however, because if the European Community takes an obdurate view the Japanese car companies may import their requirements from factories in the United States free of all restrictions. If we had a mind to, we could adopt as a negotiating stance the fact that Japanese companies such as Honda, Nissan and Toyota could simply import cars from the United States without let or hindrance.
We should also remember that German transplant factories are being set up in eastern Europe and other eastern bloc countries which are desperate for investment. What is the future of those companies and manufacturing units? One cannot consider the Japanese factories in isolation. We have to take into account the emerging requirements and productive capacity of eastern bloc countries. I hope that my hon. Friend will take due notice of that.
Britain faces a number of restrictions from the European Community which seem extremely one-sided. Recently there have been restrictions on airline deregulation. We are particularly good at that, but other European countries seem to be the opposite, so airline deregulation has been dropped. Road haulage is another area in which we are particularly efficient, but the Germans are not and are therefore blocking developments there. To achieve the free and open market that we all want, Britain cannot always give, give, give. We have to ensure that there is give and take in Europe and that there is genuine negotiation throughout all industrial and commercial sectors.

Mr. Dennis Skinner: rose——

Mr. Redwood: My hon. Friend the Member for Harrow, East (Mr. Dykes) asked about figures, and I wanted to be sure that I had them right before I responded to his question. I did not want to quote them off the top of my head. The output of motor cars in Germany in 1988 was 4·3 million. My hon. Friend might like to know that the real gap emerged between British and German production during 1974 and 1979. Over that period, our production fell from 1·5 million to jut over 1 million while German production leaped ahead from 2·8 million to just over 4 million. Since 1979, there has been a slightly higher rate of growth in the United Kingdom than in Germany, but on a much smaller base. The figures that the Government and my hon. Friend the Member for Birmingham, Northfield (Mr. King) have been using imply that the British growth rate will accelerate considerably. I am sure that all of us in this place look forward to seeing the strengthening of the wider British motor industry over the next few years.
My hon. Friend the Member for Harrow, East asked also about the Government's attitude to taxation. We do not believe that tax harmonisation is a vital part of the open market in cars. Each country applies its own tax rates for sales, and there is free competition on that basis. It is far from the truth that our tax is uniquely excessive. Several other member states place much higher rates of tax and duty on cars, and they are equally nervous about harmonisation. It is not Britain alone which is delaying the possibility of tax harmonisation because it does not wish to see revenue loss. In Denmark, for example, VAT is levied at 22 per cent., and there is a high initial registration tax. In France, there is 25 per cent. VAT. There are other countries that have higher levels of tax.
My hon. Friend the Member for Southend, East (Mr. Taylor) asked whether we could block the proposals. I understand that the measure requires unanimity. Progress has been slow because many countries are worried about the tax proposals. My hon. Friend asked also about the trading deficit. Again, I wanted to ensure that my response was accurate. The deficit in passenger cars in the most recent year was £5 billion. My hon. Friend has already given the House figures specific to the European Community and Germany. As he implies, the worst part of the deficit lies in our trade with Germany.
The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) rightly pressed me to say more about the negotiations and the deal that the Government think that they can get. I agree with the hon. Gentleman because I think that we can succeed through negotiation. We are negotiating strongly, and I have made it clear tonight that we intent to win. We take the view that the issue is vital for the nation and for new investors who have come here.
There are three stages in the process. I remind the House that there were rumours when Nissan first came to the United Kingdom that its cars would not be accepted into certain European Community country markets. Nissan cars are being produced, and I believe that there are no blocks on their exit from the United Kingdom into other European markets. That is in part because of the strong representations that the Government made successfully on behalf of Nissan.
I agree with my hon. Friend the member for Northfield that we have some strong points to make in the negotiations. The fact that Japanese cars could be

imported from the United States without let or hindrance is an important factor to get across to other member states. Transplant factories, as the Community likes to call them, in other countries mean that positions are shifting as others benefit from transplant locations. Other countries are beginning to see the difficulty in making a distinction between a Japanese holding company, an American holding company, a Swedish holding company, or whatever country may be benefiting their country by inward investment.
As my hon. Friend the Member for Derbyshire, South (Mrs. Currie) implied, there is a good legal process that we believe we could use. We hope, however, that it will not come to that. If the negotiations went wrong for any reason, of course we would take the best legal advice that was available. We would pursue any case that we thought that we could mount, and with full vigour. Our current view is that the treaty position is clear. It gives transplant factory cars the right of entry into other Community markets. We would want to see that right upheld by legal challenge through the courts until we had what we needed for the car plants in the United Kingdom.
Several hon. Members referred to scrutiny. I have always favoured good and effective scrutiny in the House. Wherever there are issues that I am handling in the financial area, which is my remit, I try to ensure that the House is informed at an early stage and that we have the 'opportunity for an early debate on the proposals. The proposal before us, in so far as it relates to the important political points about the negotiations on quotas, voluntary restraint agreements and Japanese cars that are produced in Britain, is timely. Decisions have not been made, and the views of the House will be presented forcefully to the European Community by me and my colleagues to ensure that our position is strengthened by the fact that we have been through a proper democratic process and that the voice of the House has been heard clearly on an important national interest. I agree with the hon. Member for Newcastle upon Tyne, North about the work on technical standards, which we welcome, but more must be done by the European Community. That work will benefit our companies and those elsewhere in the European Community.
My hon. Friend the Member for Southend, East and the hon. Member for Newcastle upon Tyne, North asked about quotas. The hon. Member for Newcastle upon Tyne, North was a little mistaken, because only three European Community counties have quotas. Some others have VRAs, including Britain. I was not sure whether he was saying that it is Labour policy to impose quotas where they have not been imposed before. That would create problems, given the treaty obligations to free trade and the European Community's obligations through GATT. The Government believe that progress in the GATT round is vital to our interests. We therefore do not want people to talk of imposing new quotas and quantitive restrictions when we are making progress in the GATT negotiations.
I agree with my hon. Friend the Member for Southend, East that it is an important objective to create an open market. The Government will handle the negotiations as set out in the explanatory memorandum to ensure that that objective is achieved without undermining the British objectives that we hold so dear to heart.
The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) made a point not covered by the document about differentials in car prices. My hon. Friend


the Member for Northfield provided some of the answers to those differences. One must consider the price without the tax element, the specification, the discount structure and several other complexities. The Director General of Fair Trading is closely considering recent evidence implying a widening of the differentials in car prices. If he thinks it appropriate, he will introduce measures to tackle the problems mentioned by the hon. Member for Inverness, Nairn and Lochaber and other hon. Members which account for those differentials in prices.
My hon. Friend the Member for Derbyshire, South was rightly concerned about the future of Toyota. She played an important role in securing its investment for her constituency and county, which we welcome. She is right that it is an example of dynamic private enterprise. It will do well as a result of its wise choice of Derbyshire and Britain under the Government's attractive pro-enterprise policies.
I agree with my hon. Friend the Member for Derbyshire, South that within the European Community we wish to avoid any sense that we are anti-Japanese. I opened the debate by making clear the Government's position that good Japanese investors are more than welcome. We are extremely positive about them because they have an important role to play in building our industrial future, improving our balance of payments and working with us in the manufacturing revival that is now so clearly under way. The document, which in some places has not worn too well in the translation from French, at times gives too much credence to member states that are anti-Japanese in spirit in some of their statements. The Government will endeavour to ensure that the European Community adopts as fair an attitude to Japan as it does to the other overseas trading partners that we value.
I found Labour's position on the document as unclear as its position on everything else. I can understand the difficulties of the hon. Member for Newcastle upon Tyne, North. The right hon. and learned Member for Monklands, East (Mr. Smith) made a speech in the United States about the wonders of the open market, competition and free enterprise, but we read that the hon. Member for Dunfermline, East (Mr. Brown) is busy adopting and endorsing Labour's policy review on industrial policy. The tensions are obvious for all to see. The Labour policy review is riddled with the failed policies of the 1960s and 1970s. More subsidy, more intervention, more Government meddling with business—those were the policies that demolished the British motor car industry so successfully between 1974 and 1979. Yes, it has taken some years to correct the position, because the dose of bad medicine that the Labour Government gave proved to have a deep-seated effect and to cause enormous trouble.
At some point, the House should return to the more general questions of how to achieve a thriving industry, which policies are best and whether the Labour party will back the right hon. and learned Member for Monklands, East in the free market views that he expressed in the United States or whether it will back the backward-looking views of the hon. Member for Dunfermline, East in his endorsement of the Labour policy review.

Mr. Roger Knapman: Perhaps my hon. Friend will give the hon. Member for Bolsover (Mr. Skinner) a chance to answer that question.

Mr. Redwood: I should be happy to give way to the hon. Member for Bolsover (Mr. Skinner) if he can answer that question.

Mr. Skinner: First, the Minister did not ask the leave of the House to speak twice, so he obviously does not know the rules. Secondly, is he aware that there are anti-Marketeers on the Conservative Benches who stay up for these debates? At the end of this debate, I shall shout no, because I know where I stand on the issue. I hope that the hon. Member for Southend, East (Mr. Taylor) will join me as a Teller, so that we can divide the House.

Mr. Redwood: I am grateful to you, Madam Deputy Speaker, for giving me permission to speak twice.

Mr. Skinner: The hon. Gentleman did not ask for leave.

Mr. Redwood: I took it from your expression, Madam Deputy Speaker, that you had given me that permission. I noticed that the hon. Member for Bolsover immediately had to divert the issue from the important point of how industry can prosper and do well. On this, as on everything else, the Labour party has either no answers or the old answers that failed. I commend the motion to the House.

Question put:—

The House divided: Ayes 36, Noes 0.

Division No. 183]
[12.11 am


AYES


Amess, David
King, Roger (B'ham N'thfield)


Amos, Alan
Knapman, Roger


Baker, Nicholas (Dorset N)
Lang, Ian


Boswell, Tim
Lawrence, Ivan


Bowis, John
Lightbown, David


Brazier, Julian
Maclean, David


Burt, Alistair
Neubert, Michael


Carlisle, Kenneth (Lincoln)
Patnick, Irvine


Carrington, Matthew
Redwood, John


Cash, William
Renton, Rt Hon Tim


Chapman, Sydney
Stevens, Lewis


Chope, Christopher
Waldegrave, Rt Hon William


Coombs, Simon (Swindon)
Waller, Gary


Dykes, Hugh
Widdecombe, Ann


Fallon, Michael
Wood, Timothy


Favell, Tony
Young, Sir George (Acton)


Garel-Jones, Tristan



Gill, Christopher
Tellers for the Ayes:


Goodlad, Alastair
Mr. Tom Sackville and Mr. John M. Taylor.


Gregory, Conal



Johnston, Sir Russell





NOES


Nil


Tellers for the Noes:



Mr. Dennis Skinner and Mr. Dave Nellist.

Question accordingly agreed to.

Resolved,
That this House takes note of European Community Document No. 10971/89, relating to the Community motor vehicle market; and supports the Government's view that it provides a useful framework for considering the detailed measures which will have to be implemented in the Community to bring about a Single Market in the vehicle sector.

Nuclear Missiles (West Germany)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]

Mr. Cyril D. Townsend: I am delighted to have this opportunity to raise the subject of the enhancement of short-range nuclear missiles in West Germany. I am most grateful to my right hon. Friend the Minister of State, Foreign and Commonwealth Office for being present to reply to this brief debate. My short-range missile was aimed at the Ministry of Defence and I am intrigued to find that it has been intercepted by the Foreign and Commonwealth Office.
The subject of my debate is topical. Tonight's Evening Standard carries a report on page 2 that begins:
NATO is to scrap controversial plans to modernise short-range missiles in Europe".
The report quotes an unnamed NATO diplomat as saying:
'There is now universal recognition within the alliance that we cannot deploy a new short-range missile that would hit democratic countries in Eastern Europe.'
I have been saying that for months and have been howled down by the Government Front Bench for my pains. The report continues:
'It is simply now a question of a formal decision and announcement to that effect. The outcome is not in doubt.'
This is an extremely important topic for the United Kingdom and NATO. I have had the chance to question Defence Ministers on this subject in recent months and so far I have found their replies disappointing. The Government appear to be one beat behind the band. I hope for a more sympathetic and understanding response tonight from the Minister—one that leaves behind last year's briefing papers and faces the new realities in Europe.
In a nutshell, my case, which is supported by many of my hon. Friends, is that flexible response needs to be revised in the light of the much-reduced threat in Europe. If we fail to do so, or are slow to do so, we shall undermine Britain's nuclear policies in general, and our political opponents will seize on the fact, as they have done so effectively during recent Defence questions.
There is a constant job to be done by Ministers in putting over to the public at large why the United Kingdom and NATO need nuclear weapons in the 1990s. It is not good enough just to hold on to our supporters in this matter. We need to gain fresh supporters, particularly among those in their 20s and 30s. If, once again, defence is to be a strong card for the Government at the next general election, we need to convince the electorate that our defence policies are sound, realistic and, above all, up to date.
Eighteen months ago, I fully supported the need for NATO to modernise its short-range nuclear forces. The debate was intensively waged in the run-up to the NATO summit of May 1989. Alongside the wider debate within NATO, there was an intense debate within the West German ruling coalition, and the issue was regarded as one of great sensitivity which might affect the outcome of the West German election. Broadly speaking, the Christian Democrats and Chancellor Kohl favoured the retention of some short-range nuclear capacity after Lance becomes obsolete, and that is expected to be in the mid 1990s, whereas the Free Democrats and Foreign Minister Genscher were more inclined to accept the Soviet offer of a "third zero".
In view of that sensitivity, some senior members of our Government approached the subject without sufficient tact and diplomacy. It also seemed to some of us that British military opinion was less rigid on the subject than No. 10. Now, following the extraordinary and historic changes in eastern Europe—no Berlin wall, free elections in Czechoslovakia, Hungary, Bulgaria and East Germany, and an end to the Communist monopoly in the Soviet Union—undeniably there has to be fresh thinking.
Lord Carrington, who is uniquely qualified to comment on these issues, was reported in The Daily Telegraph of 21 November as saying:
I would have thought there is no conceivable situation now in which short-range nuclear weapons which land on East German soil would be acceptable. That chapter, I think, is over.
I think that that chapter is over, too. Defence experts outside the Government ranks think that that is so. One purpose of this short debate is to find out whether the Minister now agrees, and, if not, why not.
The Lance is the only land-based nuclear missile deployed by NATO in Europe. It has a range of 110 km, so, from its present deployment positions in West Germany, it could reach only East Germany and Czechoslovakia. I cannot believe that the Germans, rushing towards reunification, could ever agree to any replacement being deployed on German soil. Why should they?
Formally, at least until this evening, the British Government have not changed their position. The arguments that we on the Government Benches used 18 months ago were being used until today, though in very different circumstances. On the surface, the Government have not responded to the changed public mood, and if the Minister thinks I am exaggerating I draw his attention to Defence questions on 3 April. It has been a political mistake not to have responded to that changed public mood.
We are told that the comprehensive concept of May 1989 still represents official NATO policy and that no further decisions have been taken by the alliance as a whole. These are complex matters needing widespread consultation, but Ministers, busy in their offices and at conferences, have forgotten the politics of it all.
We understand that the SNF issue is being studied intensively by the so-called high level group which is due to report to the nuclear planning group in Alberta, Canada, on 9 and 10 May. Modernisation was discussed by the Prime Minister and President Bush in Bermuda on 13 April. It was agreed that there should be a new NATO summit in the near future and that that meeting would address not only nuclear modernisation but such heavyweight subjects as the future status of Germany in NATO and, long overdue, the reintegration of France into some aspects of the NATO military structure. According to the Sunday Times of 15 April:
Officials on both sides said Mrs. Thatcher had told the President she was prepared to abandon her insistence that NATO's ageing Lance short-range nuclear missiles be modernised, and had acknowledged that the Lance and remaining nuclear-tipped artillery shells would have to be taken out of the new Germany and transferred, probably to Britain.
Did British officials give any such guidance? If that report is true—and I hope that it is—it is high time that the House had an early statement, for it represents a major change in British defence policy.
Meanwhile, decisions on the deployment phase in the United States are more immediate. Congressmen with whom I discussed the matter during the Easter recess told me that they would not allow any further funding. On 14 April, Jane's Defence Weekly reported that the Pentagon had told the United States army missile command not to proceed with tendering for the contract, apparently in anticipation of a decision by Congress. Congress would be wise to rule out any further funding.
It seems that, as in Britain, the top leadership has got out of touch with political and public opinion. It is also out of touch with expert opinion. For example, Atlantic News of 4 April reported a study for the John Hopkins foreign policy institute by Mr. Brezinski which recommended the abandonment of the follow-on to Lance. The same source on 18 April recorded a Washington Post interview with General Galvin in which he admitted that deployment was becoming unlikely.
While most NATO Governments have yet to comment, the Belgian Government have stated that Lance modernisation no longer makes sense. Lord Salisbury once remarked that it was a great mistake to hang around the carcases of dead policies. The British Government should now state clearly that the replacement of Lance is unrealistic and that, as a result, they will go for the development and deployment of new air-launched nuclear missiles. The NATO aircraft involved will be based not in Germany but in the four states originally earmarked for intermediate nuclear force deployment: the United Kingdom, Italy, Belgium and the Netherlands.
Following the recent talks between President Bush and President Mitterrand, it is possible that France will co-ordinate its own plans for an air-launched missile with NATO. That would be a welcome step forward. It is just possible that at some future time France will agree to house United States bases.
Of course, some people outside the House will say that such an SNF capacity is no longer required. That is going too far. The Soviet Union has already modernised its nuclear weapons in this category. It is thought to have 1,450 launches—a ratio of some 16 to one. Those weapons—at least for the time being—threaten key NATO facilities in the forward area, especially airfields and communication centres. They might be moved after negotiations, perhaps at the same time as the withdrawal of the Lance missiles, but that remains in the future.
The Government must update both their position and their arguments. I hope that it will not be long before the Secretary of State presents to the House a new policy along the lines that I have suggested: such a policy will carry conviction with Conservative Back Benchers, the defence community and the British public.

The Minister of State, Foreign and Commonwealth Office (Mr. William Waldegrave): I do not think that my hon. Friend will be surprised if I do not announce a new NATO policy tonight single-handed. Perhaps, however, I can give him an element of the updated position for which he asks—at least in relation to our general approach, which is, of course, fluid.
Dramatic and far-reaching changes in eastern Europe have created a new context and a new challenge for

NATO. The prospect of German unification and the advance of democracy and independence throughout eastern and central Europe have revolutionary implications for the Warsaw Pact, and profound—but less simple—implications for NATO. The full agenda for NATO's defence and foreign Ministers will involve them in many meetings in the coming weeks. As my hon. Friend has said, we hope that it will be possible for a NATO summit to endorse the direction in which NATO must evolve in the 1990s. Indeed, there is great interest in NATO's future generally, and particularly in the role to be played by a united Germany.
I hope that there will be no question of undermining the core arrangements—collective arrangements—which have guaranteed the West's security for 40 years. Our position is clear, as is that of our principal allies. At the Königswinter conference in Cambridge, the Prime Minister listed what she considered to be the three essential conditions for continuing security. First, a united Germany should be part of NATO, as that would offer the best security for Europe as a whole. Strikingly, that is the view not only of the Federal Republic and the rest of NATO, but of several eastern European countries. Secondly, United States and other stationed forces should remain in Germany, albeit possibly at reduced levels. Thirdly, NATO should continue to deploy nuclear weapons where strategy dictated it, and that should include Germany. Those conditions will underpin NATO's deliberations in the coming months.
We have welcomed the ideas advanced by the United States to give NATO an increased political role. That role, however, must be a development of the underlying military role which it must retain. We need to preserve the essentials of military structure in the process of updating and re-evaluating NATO's future posture. Change and upheaval in the Soviet Union and eastern Europe bring uncertainty. We have seen it again in the last few weeks. We must not lose sight of the fact that the Soviet Union remains a super-power with a wide range of nuclear and conventional weapons. She has carried out the modernisation of her own short-range nuclear weapons and of her nuclear artillery. That capability, having been modernised throughout the 1980s, stretches potentially into the future and extends the Soviet Union's overwhelming numerical imbalance compared with NATO forces.
At the heart of NATO's achievement in the last 40 years is the collective will that it represents. The essence of its strength—often slow moving—has been that collective nature. That is particularly important in relation to the decisions about nuclear systems, which often take decades to develop. Planning is frequently slow and cautious—and rightly so. However, NATO is not blind to the changes in Europe. They will affect requirements in terms of numbers and the types of systems that underpin our continuing need, against the super-power to our east, for an effective nuclear deterrent strategy.
There are two complementary factors at work in determining the future composition of short-range weapons in west Germany and elsewhere. They reflect NATO decisions taken in the early 1980s. There is the need to preserve and, if necessary, to modernise NATO's overall nuclear capability in order to ensure a credible and sustainable deterrent. There is also the task of continuing to reduce and rationalise the nuclear stockpile without reducing security. On the first point, my right hon. Friend the Prime Minister and the President of the United States


reaffirmed in Bermuda a fortnight ago that NATO would continue to rely on deterrence, based on a mix of conventional and nuclear weapons, including SNF. They stressed that these weapons must be kept up to date.
My hon. Friend referred to the comprehensive concept of arms control and disarmament agreed by the heads of Government last May. The commitment to modernise weapons as necessary still stands, as does the formula in the comprehensive concept—that any negotiations on reducing the United States and the Soviet SNF would depend on substantive progress in the separate negotiations on conventional forces in Europe.
We shall need to assess how to achieve the second objective of reducing the NATO stockpile. NATO will consider the possibility of reductions in current nuclear forces. As my hon. Friend knows, since 1979 we have reduced the stockpiles by 35 per cent. We hope that the Soviet Union will take parallel action and will begin to match those reductions. The Soviet Union's reductions so far have been derisory.
The scale and nature of the future deployment of SNF and other military forces in west Germany and elsewhere will depend upon NATO consultations on which weapons systems will be required and on what reductions in existing forces are possible. That is part of our collective security and it is the principal point that I wish to put to my hon. Friend.
The message matters, but the medium matters, too—not only the substance of decisions but the means for arriving at those decisions. NATO would long ago have been reduced to a shambles of squabbling individual countries if each country had pursued its own political bent at any one time. The strength of the alliance over the years has been our commitment to collective decision taking.

Mr. Cyril Townsend: I happily concede that point, but ought not the Government at least tell the public about the direction in which NATO ought to be going? That has not been done in this particular area.

Mr. Waldegrave: It depends what we think the principal challenge to NATO is. I believe that the challenge for NATO, at a time of rapid transition and change, is to maintain coherence—not to take the role of commentator. That role is vital. So, too, is the Back Bencher's role. Surely the Minister's role is to judge at a particular time which is most important—to maintain the collective unity of decision-taking or to indulge in the role, which is a proper role for others, of exploring and kite-flying.
In the past few months, the period of transition, the Governments who have floated ideas from which they have sometimes then backed away and who have flown kites which have turned out not necessarily to be timely have not been those contributing most to the continuing solidarity of the alliance. It is important to see that the solidarity of the alliance, which at one time at the end of

last year began to look rather frail, has been restored by the Americans' stalwartness and leadership in showing that they remained wholly committed to taking the decisions in the right format and at the right time.
That is not to say that we should not, at the right time and in the right format, move the great engine of the alliance forward, and doubtless we shall. Many of the arguments and many of the excellent analyses, including those offered by my hon. Friend will contribute to the next decisions as they come. In retrospect, it will not be seen to have been wrong that some at the heart of the alliance have argued throughout this period that the principal objective and duty of senior Ministers was to try to maintain coherence even against short-term political pressures. This House, this party and my hon. Friend have a record of which to be proud in standing against short-term political pressures to win the greater prize.
My hon. Friend will not be disappointed in the quality of analysis that will come forward over the next weeks of intensive inter-alliance discussion that we now face with the North Atlantic Council, with an extra summit and a whole raft of meetings at the highest level. Clearly, this will be a decisive year for NATO, for the alliance and for the west in terms of sketching out our defence strategy for the next period. However, it will not come to be seen as having been unduly hesitant for us to have waited and watched to see how developments turned out before rushing down particular routes.
The bottom line remains the maintenance of the trans-Atlantic alliance and the maintenance of the American commitment to Europe, with United States forces—and United States nuclear forces—in Europe, and with those forces in the right mixture and up to date. We have intensely difficult political pressures to try to handle, which are different in each country. The only hope of handling them in a way which produces a rational outcome is to do so collectively and carefully. NATO will collectively decide the next steps, and NATO will reaffirm the need for close trans-Atlantic co-operation. Like my hon. Friend, I should welcome any steps that the French may feel able to take to move closer to us. Their commitment to the trans-Atlantic alliance is in no doubt and has been reaffirmed by President Mitterrand in his recent talks with the United States president.
I urge my hon. Friend to be a little more patient. I do not know what the final outcome will be, but I believe that the method of decision-taking will be almost as important as the decision in the short term. The member countries of NATO must not show that when the immediate pressures are off we all rush down the easiest political path in the short term. We should try to maintain our collective will because that collective will, which has served us so well for the past 40 years and to which my hon. Friend is as committed as any in the House, may well be needed to serve us in the next 40 years.

Question put and agreed to.

Adjourned accordingly at eleven minutes to One o'clock.